- FTX is asking for permission to sell its four solvent subsidiaries:
- LedgerX, also known as FTX Derivatives, FTX Japan, FTX Europe, and Embed Business.
- FTX said these units operated on “a generally independent basis” and had separated customer accounts, management teams, and IT systems.
- FTX wants to sell the businesses quickly.
- The bankrupt exchange has received “dozens” of unsolicited inquiries about the acquisition of the said units.
Bankrupt crypto exchange FTX intends to sell its solvent units, including LedgerX, known as FTX Derivatives, FTX Japan, FTX Europe, and Embed Business.
In a new court document filed with the U.S. Bankruptcy Court of Delaware on Thursday, FTX attorneys said that it’s their “priority” to “explore sales, recapitalizations or other strategic transactions” of the subsidiaries and asked for permission to sell them.
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FTX pointed out that the businesses it intends to sell were acquired “fairly recently” and operated on “a generally independent basis.” Unlike the insolvent subsidiaries, the businesses maintained “segregated customer accounts” and had separate management teams and IT systems.
FTX said it wants to sell the units as quickly as possible because some have their licenses or operations suspended, which might negatively affect their assets.
“The licenses held by FTX Europe have been suspended along with its operations, and FTX Japan is subject to business suspension and business improvement orders. The longer operations are suspended, the greater the risk to the value of the assets and the risk of a permanent revocation of licenses.”
FTX also said that each of the businesses they want to sell has experienced significant employee and customer “attrition pressures” and that potential buyers might enable them to continue or restart the operations of the units. The sales of the subsidiaries would also benefit FTX’s creditors.
“A sound business purpose for the sale of a debtor’s assets outside the ordinary course of business exists where such sale is necessary to maximize and preserve the value of the estate for the benefit of creditors and interest holders.”
FTX has already received “dozens” of unsolicited inquiries for the businesses and offered preliminary bid dates, ranging from January to March of next year. Potential buyers would need to participate in bankruptcy court hearings in March.
On the Flipside
- It’s unclear whether the bankruptcy court will approve the sales of the FTX subsidiaries.
Why You Should Care
If FTX manages to sell the four subsidiaries, its creditors will benefit from the proceedings. Investors who lost funds on FTX should keep an eye on this matter.
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