$FTT FTX Refinances $10 Million Subsidiary with $500K Liquidation
FTX's continued focus on earning cash to settle obligations is a key priority.
A subsidiary of the debtor has filed to sell for $10 million at a steep discount.
The decision was made after FTX decided not to proceed with preparations to revive its failed exchange.
In the face of increasing pressure from creditors and authorities, FTX's CEO John Ray III is determined to repay debtors with cash. The estate of the now-defunct exchange is doing all it can to repay consumers, including looking through old transactions for crumbs and taking advantage of Bitcoin shorts, in order to sell assets at cheap prices.
Aims to Offload DCI Holdings
Terence J. Culver, the original CEO and seller of Digital Custody Inc. (DCI), is providing financing for the sale to CoinList, which is taking place at a steep discount of 95% from the original acquisition price of $10 million in 2021 and 2022. The FTX Debtors estate has filed to sell the subsidiary.
Attorneys for FTX said in the document that DCI planned to act as a custodian for FTX.US and LedgerX. While it was part of the exchange's operations, it was never completely integrated until November 2022, when SBF filed for bankruptcy.
Extract from the motion to sell.
Following the announcement that FTX.US would not be revived, the estate attorneys said that DCI was considered an asset with little value, which led to the decision to sell it. FTX attorneys penned:"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."
Even FTX's ex-CEO Culver made a bid for DCI—one of three. The potential of the acquisitions to speed up the changeover was a deciding factor for the debtors' estate. If the sale goes through, the debtors' estate will be charged a reverse termination fee of $50,000, although they have a short window to explore other proposals before concluding the contract, as long as the proper committees have authorized it.
