Blockchain News

FTX Customers Want More info on FTX’s Plans to Sell Subsidiaries

While the Ad Hoc Committee does not want to stop the sales, it believes it must be involved to ensure that customers’ interests are represented.

A group of FTX customers has filed a limited objection to FTX’s plan to sell four independently-operated subsidiaries, arguing that they should be allowed to participate in the sales process to ensure that customer interests are represented.

It has also expressed concerns that “misappropriated customer funds” may have been used to acquire or maintain these businesses.

The limited objection was filed on December 4 by an ad hoc committee of non-US customers, which consists of 18 members with claims against FTX totaling more than $1.9 billion.

The committee argued in its filing that previous public statements by FTX, the Securities and Exchange Commission, and the Commodity Futures Trading Commission made it clear that the customer assets on the platform belonged to customers, not FTX.

It expressed “significant concerns about the lack of information regarding the sale of the businesses” and questioned whether the businesses were “required for a potential restart” of FTX.

A limited objection is similar to an objection in that it applies only to a portion of the proceedings. In this case, the limited objection stems from the Ad Hoc Committee’s exclusion from the sale process.

The committee has asked the judge to allow them to serve as “consulting professionals” to ensure customers’ interests are represented throughout the bidding process, adding, “The Ad Hoc Committee does not seek to obstruct the Debtors’ pursuit of value-maximizing transactions, so long as the interests of customers are protected.”

Only consulting professionals will be able to attend the auction and consult with FTX on matters relating to the sale process under the proposed bid procedures, and the committee notes that the consultation parties have no control over the process other than the ability to provide counsel.

On December 15, FTX requested permission from the bankruptcy court to sell its European and Japanese branches, as well as derivatives exchange LedgerX and stock-clearing platform Embed.

During the bankruptcy proceedings, LedgerX in particular has been hailed as a success story, with Commodity Futures Trading Commission Chairman Rostin Behnam noting that the firm had essentially been “walled off” from other companies within FTX Group and “held more cash than all the other FTX debtor entities combined.”

Last week, the same committee requested that customers’ names and private information be removed from court documents, citing the risk of identity theft, targeted attacks, and “other injury.”


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