Crypto News- The FTX debtors’ estate, under the guidance of CEO John Ray III, has submitted paperwork to sell Digital Custody to CoinList at a substantial markdown of $500,000. The financing for this deal is being provided by Terence Culver, the original CEO and seller of DC. FTX had initially acquired Digital Custody for $10 million.
FTX’s Bankruptcy Strategy: Digital Custody to be Sold for 500K Dollars
In their legal filing, FTX disclosed that the acquisition of DC was aimed at providing custodial services for FTX US and LedgerX. However, the integration of DC into the FTX ecosystem was incomplete when former CEO Sam Bankman-Fried filed for bankruptcy in November 2022, just three months after acquiring DC. FTX had made two separate $5 million transactions to acquire the company in December 2021 and August 2022. FTX’s legal team clarified that with FTX US not operational, Digital Custody’s value to the estate has diminished significantly. They stated, “DCI is 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 U.S..”
FTX Bankruptcy: Digital Custody Sale and Restructuring Revealed
Despite this, Digital Custody still retains its custodial license from the South Dakota Division of Banking. After considering three offers, including one from Culver, the debtors opted for the better offer, which promised a swift completion of the sale and a favorable relationship with Culver, likely to expedite regulatory approval. FTX’s legal team highlighted that both the committee and the ad hoc committee of non-U.S. customers of FTX.com have approved the transaction. However, FTX reserves the right to entertain superior offers for DC until three days before the closing. In case the buyer backs out, a reverse termination fee of $50,000 will be incurred.
FTX, the now-defunct cryptocurrency exchange, has made it clear that its restructuring strategy does not involve relaunching the company but is focused on repaying customers in full. In a court hearing on Jan. 31, FTX’s lawyer, Andy Dietderich, stressed that despite exhaustive efforts, there are no plans for a relaunch.
Previously, numerous FTX users petitioned a U.S. bankruptcy judge to prevent the collapsed crypto exchange from valuing their cryptocurrencyOKX in Argentina: Cryptocurrency Exchange Announces Start of Operations in Argentina deposits using 2022 prices, arguing that this approach deprived them of the benefits of the recent surge in crypto prices.