FTX Trading Ltd. and its affiliates have announced a plan to sell a subsidiary it acquired for $10 million to Coinlist for $500,000, court documents filed on Feb. 9, 2024 show. The latest motion, filed in the United States Bankruptcy Court for the District of Delaware, details the proposed sale in order to maximize the value of the estate for creditors and stakeholders.
FTX to Sell Subsidiary Acquired for $10M to Coinlist for $500K Amid Bankruptcy Proceedings
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Court Filing Shows Bankrupt FTX Plans to Sell Subsidiary Digital Custody Inc
The now-defunct crypto exchange FTX led by the new CEO and chief restructuring officer John Ray III, wants to sell a subsidiary the bankrupt entity acquired for $10 million. The debtors are seeking court approval to sell their interests in Digital Custody Inc. (DCI) to Amalgamated Token Services Inc. (Coinlist) for $500,000.
“Given the timing of the acquisition, DCI was never integrated into the operations of FTX US or Ledgerx prior to the commencement of these Chapter 11 Cases,” the court filing notes. “Following the commencement of these Chapter 11 Cases, the debtors sold its interest in Ledgerx in May 2023. The Debtors have also never sold or restarted the FTX US exchange. DCI has relatively few operations but still retains a valuable franchise.”
The bankrupt entity’s lawyers add:
DCI is also no longer useful to the debtors’ business given the debtors’ sale of Ledgerx and that it is unlikely for the debtors to sell or restart FTX US.
The court filing further emphasizes the sound business justification for the sale, aiming to maximize the value of the estate for creditors and stakeholders, and outlines the procedural steps and legal grounds under which the sale is proposed. “The debtors, with the assistance of their financial advisor, Alvarez & Marsal North America, LLC, designed a process to market the interests in an efficient and competitive sales process,” the filing notes. “Such efforts included creating and reaching out to a proprietary list of potential acquirers for the interests.”
The filing seeks the court’s approval for the transaction, emphasizing its critical role in FTX Trading Ltd. and its affiliates’ financial rehabilitation and reorganization efforts. This sale is depicted as a calculated strategy to divest assets in a way that advantages creditors. The announcement to divest DCI is in line with the FTX estate’s strategy to offload its stake in Anthropic, which equates to an estimated $1.4 billion.
What do you think about FTX planning to sell DCI to Coinlist for $500,000? Let us know what you think about this subject in the comments section below.
