Dubai’s FTX Exchange Faces Voluntary Liquidation After Motion to Dismiss From Parent Company
The motion filed in Delaware bankruptcy court by FTX states that FTX Dubai has never engaged in operational activities or had any customers. The crypto exchange received a license to operate in Dubai in July 2022 but did not offer any services prior to FTX’s bankruptcy filing in November. Dubai regulators suspended FTX Dubai’s license shortly after the bankruptcy filing, and the license expired in July 2023.
Key Points:
- FTX Dubai never started its operations and had no customers.
- The license of FTX Dubai was suspended and expired after FTX’s bankruptcy filing.
- Without any revenue-generating activities, FTX Dubai has no reasonable likelihood of rehabilitating operations.
- FTX believes dismissing the Dubai unit would allow for an orderly wind-down and liquidation of assets.
- FTX founder Sam Bankman-Fried was arrested and charged with defrauding investors.
FTX Trading and over 100 affiliated companies filed for Chapter 11 bankruptcy protection in November 2022. FTX founder Sam Bankman-Fried was arrested in December and charged with defrauding investors. FTX Dubai’s motion to dismiss argues that bankruptcy proceedings are not necessary and would only lead to further administrative expenses. FTX believes that voluntary liquidation is in the best interest of the company and its creditors. The court will decide whether to grant dismissal of the Dubai subsidiary in a hearing later this month.
Hot Take:
FTX Dubai’s voluntary liquidation is a strategic move to wind down the subsidiary without incurring further administrative expenses. This decision aligns with the company’s reorganization strategy and offers potential benefits to both FTX and its creditors. As FTX continues to navigate its bankruptcy proceedings, it remains to be seen how this will impact the wider crypto industry and the reputation of FTX as a whole.
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