FTX Dubai recently, bankrupt cryptocurrency exchange FTX has filed court documents seeking the exclusion of its Dubai unit from the ongoing wind-down proceedings in the United States. The bankruptcy filing occurred last November, initiating Chapter 11 cases for 102 associated entities worldwide. Among these entities, FTX Dubai, established in February 2022 and owned by the company’s European arm, was also included in the proceedings.
FTX Dubai Unit’s Exclusion in U.S. Bankruptcy Proceedings
FTX argues that FTX Dubai did not engage in any business activities before the bankruptcy filing in the United Arab Emirates, and as a result, it lacks a reasonable likelihood of rehabilitating its operations. Thus, the bankrupt estate is requesting the dismissal of FTX from the proceedings.
“Additionally, FTX Dubai is a balance sheet solvent. Therefore, the debtors believe that a solvent voluntary liquidation procedure in accordance with the laws of the United Arab Emirates would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets,” the filing said.
While FTX was part of the proceedings, the estate maintains that any court orders related to it should still be upheld. However, it deems the dismissal of FTX necessary to safeguard the interests of the debtors and to authorize them, for example, to pay pre-bankruptcy wages, salaries, and other compensation, as well as benefits and expenses owed to Dubai-based employees.
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