FTX gets nod to sell Embed, LedgerX, Japan and Europe units
Judge John Dorsey of the Delaware Bankruptcy Court has given FTX’s liquidators the greenlight to kickstart bids to sell four functioning subsidiaries — including its Japanese and European units.
The court charged with overseeing the wind-up approved the petition filed in December on Thursday after a hearing held Wednesday, with auctions planned for each company.
The businesses include custody platform and broker-dealer Embed, crypto derivatives exchange and clearing house LedgerX, FTX Japan and FTX Europe, which have reportedly attracted as many as 117 expressions of interest.
With assistance from investment banker Perella Weinberg, interested buyers can submit their offers between January 18 and February 1. Sale hearing dates would take place until March 27. Before that, the information regarding the assets of the four entities up for sale can be accessed by potential bidders as part of their due diligence before they start the buyout process.
While the bankruptcy case could take years, a committee representing FTX’s creditors has prioritized the sale of certain entities. They argued that all these businesses have solvent balance sheets, independent management and valuable franchises, but they are at “risk of losing value if not sold quickly.”
“The relative independence of each of the businesses’ operations from the remainder of the debtors’ core business operations make a potential sale process for each of the businesses relatively less complex,” the filing said.
Nevertheless, FTX’s entities have suffered regulatory pressures, also lost customers and employees. In December, the Cyprus Securities and Exchange Commission extended the suspension of FTX EU’s CIF license, which allowed the insolvent platform to operate throughout Europe, until March 31.
FTX Japan, the Japanese arm of the beleaguered crypto exchange, also devised a plan to resume customer withdrawals from February next year.
The process will see FTX Japan’s customers become clients of Liquid by mid-January, and they will have access to their money and assets again from as early as mid- February. Liquid’s handling of the process will kick off after acquiring the client book followed by conducting balance checks.
The development comes barley a week after FTX founder and former CEO Sam Bankman-Fried pleaded not guilty in New York federal court to criminal charges related to the collapse of his now-bankrupt exchange and Alameda Research.
The disgraced cryptocurrency legend was indicted on eight counts, including wire fraud and money laundering conspiracy, as well as charges of securities fraud and conspiracy to avoid campaign finance regulations. If convicted, the onetime crypto billionaire could face up to 115 years in prison.