FTX To Sell Subsidiary, Digital Custody Inc., Acquired For $10 Million To CoinList For $500,000 To Pay Back Debts

• The FTX Debtors estate has filed to sell Digital Custody Inc., a subsidiary it acquired by August 2022 for a total of $10 million, to CoinList for just $500,000 to pay debts. 
• The purchase is being financed by the former CEO of Digital Custody Inc., Terence Culver, though the Debtors may solicit better bids until three days before the motion is heard. 

FTX, under the leadership of CEO John Ray III, is on a relentless mission to generate liquidity for repaying debtors amidst mounting pressures from regulators and creditors. 

From scouring past deals for scraps to leveraging Bitcoin shorts, the defunct exchange’s estate is leaving no stone unturned in its commitment to reimburse customers, even if it means offloading assets at discounted rates.

FTX Moves To Sell DCI 

The FTX Debtors estate has filed to sell Digital Custody Inc. (DCI), a subsidiary acquired for $10 million between 2021 and 2022, now being sold to CoinList at a significant discount of 95%, totaling just $500,000, with financing for the sale provided by DCI’s original CEO and seller, Terence J. Culver.

According to the filing, FTX lawyers detailed that DCI intended to provide custodial services for FTX.US and LedgerX. However, it was never fully integrated into the exchange’s operations before SBF filed for bankruptcy in November 2022.

Now that there are no plans to revive FTX.US, the estate lawyers detailed that DCI held minimal value as an asset, prompting the decision to offload it. FTX lawyers wrote:

See Also: FTT Plummeted 30% As FTX Relaunch Hopes Fade: What To Expect?

 “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.”

FTX received three offers for DCI, including from its former CEO, Culver. The debtors’ estate chose the purchases based on their ability to expedite the transition. 

While relevant committees have approved the sale, the debtors’ estate has a brief window to seek alternative offers before finalizing the deal, with a reverse termination fee of $50,000 if the transaction falls through.

FTX Revival Off The Table

After over a year of concerted efforts to revive the exchange, FTX recently abandoned all plans, shifting its focus to reimbursing its customers in full. 

The decision follows unsuccessful negotiations with potential bidders and investors, per attorney Andy Dietderich, who cited a lack of commitment from interested parties to provide the necessary capital for the exchange’s reconstruction.

Dietderich further outlined that customers will be paid in full, with the reimbursement calculations pegged to prices from November 2022, when SBF filed for bankruptcy. 

FTX debtors estimate that customers would receive over 90% of distributable value worldwide if the Bankruptcy Court approves the amendment plan by the end of 2024 Q2.

FTX filed to sell its $1 billion stake in AI startup Anthropic. FTX recently proposed an unconventional plan to repay its customers – shorting Bitcoin with leverage.

FTX remains steadfast in its commitment to reimburse its customers, pushing forward despite the sale’s limited impact on liquidity. 

This development also marks a significant milestone for DCI, paving the way for its resurgence under fresh leadership.

#Binance #WRITE2EARN