Judge John Dorsey has allowed the sale of four necessary units of failed crypto exchange FTX, as stated in a petition in the Delaware Bankruptcy Court. LedgerX, a derivatives trading platform, and Embed, a stock trading platform with regional branches, are among the assets.
FTX Selling Its Shares Quickly
The sale of the FTX assets, which comprises the European and Japanese divisions of the cryptocurrency exchange, can now begin, with investment firm Perella Weinberg having received interest from 117 potential buyers.
The official expression of interest to purchase the permitted units of exchange can be made between January 18 and February 1. On November 11, 2022, the once-dominant exchange announced its bankruptcy. Shortly after news broke that the FTX trading arm Alameda Research had fabricated its financial statements, the crypto empire crashed.
The failed exchange wants to pay back its debts by selling its more separate and financially sound assets. The court’s decision makes it official that there can be bids, an auction, and a sales hearing. The final approval of any transaction will happen at a later date.
As Per Attorney, FTX Recovered The Funds
At the outset of Wednesday’s hearing, the attorney of the failed exchange, Andy Dietderich, informed US Bankruptcy Judge John Dorsey in Delaware the following.
We have located over US$5 billion of cash, liquid cryptocurrency and liquid investment securities.
As the FTX lawyer put it, while the crypto platform has recouped some funds, it is still working to recover its transaction history. Furthermore, the lawyer said that the whole extent of the consumer shortage was unknown.
On December 15th, lawyers filed a motion asking the court to allow the sale of the four units, despite the potential for a decrease in value. FTX Europe has had its license pulled, and FTX Japan has been hit with sanctions prohibiting it from operating.
The Department of Justice has expressed concern about sales with “severe” allegations of wrongdoing. Thus any claims related to former high-level executives or their families would be left out of the sale. While Bankman-Fried, the former CEO, has pleaded not guilty to wire fraud charges, his former lieutenants, Caroline Ellison and Gary Wang, pleaded guilty and will collaborate with U.S. authorities.
The cryptocurrency exchange has received dozens of unsolicited offers. It says it has no plans to sell any companies and will start auctioning them off next month.
Dorsey explained the problem, “I don’t know who’s a customer and who isn’t.” He scheduled a hearing for January 20 to discuss FTX’s plans for customer differentiation. He said the company should come back in three months to review cases of potential identity theft.