Embattled Crypto Firm FTX Wants to Sell Its Functioning Units, Including LedgerX

On Thursday, cryptocurrency exchange FTX asked a federal court for permission to sell several subsidiaries, including US-based derivatives wing LedgerX.

Attorneys for FTX stated in a document filed with the Bankruptcy Court of Delaware that it was a priority for the company's current management to “explore” the sale or find other strategic transactions for certain subsidiaries.

“Based on their preliminary review, the Debtors own or control a number of subsidiaries and assets that are regulated, licensed, and/or largely unintegrated into the Debtors' operations, both within and outside of the United States,” according to the filing. “The Debtors believe that a number of these entities have solvent balance sheets, independent management, and valuable franchises,” according to the statement.

LedgerX was one of these units, which also did business as FTX US Derivatives, FTX Japan, FTX Europe, and Embed Business.

Because the majority of these entities were acquired by FTX relatively recently, they functioned largely independently of their global parent. As a result, unlike some of the company's other subsidiaries, their assets and funds are kept separate from FTX.

In congressional testimony, FTX's new CEO, John Ray III, stated that even companies ostensibly separate from FTX, such as FTX US, were not truly independent.

FTX filed for bankruptcy last month, saying in filings it had over $10 billion in liabilities.

‘Dozens’ of bids

According to the filing, FTX wants to sell these units quickly. Many have had their operating licenses revoked since FTX declared bankruptcy.

“The Debtors and/or the Businesses have been in active discussions with a number of regulators on behalf of the Businesses,” according to the filing. “FTX Europe's licenses have been suspended, as have its operations, and FTX Japan is subject to business suspension and business improvement orders. The longer operations are suspended, the greater the risk to asset value and the risk of permanent license revocation.”

According to the filing, FTX has already received “dozens of unsolicited” - more than 100 - bids for the companies. If the sales are approved, interested parties may bid on the various units, according to the filing, with possible bid dates ranging from February to March. The preliminary bid deadlines range from mid-January to early February.

By these deadlines, prospective buyers must submit various documents proving their interest in the businesses as well as their ability to bid at auction.

Bidders must also demonstrate their ability to obtain regulatory approval for the sales.

If a potential bidder clears these hurdles, FTX will request bankruptcy court hearings in March.

According to the filing, approving these sales would benefit FTX's creditors.

“A sound business purpose exists for the sale of a debtor's assets outside the ordinary course of business where such sale is required to maximize and preserve the value of the estate for the benefit of creditors and interest holders,” according to the filing.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!