According to court records filed on February 9, 2024, FTX Trading Ltd. and its affiliates have declared plans to sell a company it bought for $10 million to Coinlist for $500,000. The planned sale to optimize the estate’s worth for stakeholders and creditors is described in the most recent motion, which was submitted to the United States Bankruptcy Court for the District of Delaware.
Document from Court Indicates Bankrupt FTX Is Planning to Sell Digital Custody Inc. Subsidiary
Under the direction of its new CEO and chief restructuring officer, John Ray III, the now-defunct cryptocurrency exchange FTX intends to sell a company that it purchased for $10 million when it went bankrupt. The sale of the debtors’ shares in Digital Custody Inc. (DCI) to Amalgamated Token Services Inc. (Coinlist) for a $5,000,000 price is being approved by the court.
The court petition states that DCI was never incorporated into FTX US or Ledgerx activities before the start of these Chapter 11 Cases due to the timing of the acquisition. “In May 2023, the debtors sold their stake in Ledgerx subsequent to the start of these Chapter 11 Cases. Furthermore, the Debtors have never sold or reopened the FTX US exchange. Even if DCI doesn’t operate very often, it still has a lucrative franchise.
Lawyers for the bankrupt entity also add:
Given that the debtors sold Ledgerx and that it is unlikely that they will sell or relaunch FTX US, DCI is thus no longer beneficial to the debtors’ company.
In addition to outlining the legal and procedural requirements for the proposed sale, the court filing highlights the sale’s good commercial rationale and aims to maximize the estate’s value for creditors and stakeholders. According to the petition, “the debtors designed a process to market the interests in an efficient and competitive sales process with the assistance of their financial advisor, Alvarez & Marsal North America, LLC.” “Part of these efforts involved compiling and contacting a confidential list of possible buyers for the interests.”
In its request for the transaction’s approval, the document highlights how important the transaction is to the financial recovery and reorganization of FTX Trading Ltd. and its affiliates. The sale of these assets is portrayed as a well-thought-out plan to benefit creditors. The FTX estate’s plan to sell its estimated $1.4 billion stake in Anthropic is consistent with the announcement to divest DCI.
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