FTX Sells European Arm Back to Former Owners at Discounted Price
In a recent development, FTX has reached an agreement to sell its European subsidiary back to its previous owners for $32.7 million. This comes after a legal dispute between the exchange and the founders of FTX Europe over the acquisition deal. FTX had initially filed a lawsuit against Patrick Gruhn and Robin Matzke, claiming that they sold the company at an inflated price using customers’ deposits. In response, Gruhn and Matzke filed a counterclaim seeking damages from FTX. Unable to find alternative buyers, FTX eventually agreed on a deal with the founders at a discounted price.
FTX Continues Asset Auctions to Repay Debts
FTX is actively selling off its assets in order to gather enough liquidity to repay its creditors. The exchange collapsed in November 2022 and is estimated to owe its clients around $8 billion. In addition to the recent sale of its European subsidiary, FTX has received court approval to trade off its $1 billion stake in AI startup Anthropic. It has also completed the sale of its 22 million shares of the GBTC Bitcoin ETF, raising another $1 billion. These asset auctions are part of FTX’s debt repayment strategy outlined in its restructuring plan.
Former Owners Pleased with Re-Acquisition
The new owners of FTX Europe expressed satisfaction with the re-acquisition, stating that the exchange’s European expansion was on track before its collapse. They believe that they can revive and continue the growth of the subsidiary under their ownership.
Key Figures Unavailable for Testimony
FTX cited difficulties in defending itself against the counterclaims filed by Gruhn and Matzke. This is due to key figures involved in the acquisition deal, including former CEO Sam Bankman-Fried, being unavailable for court testimony. FTX considered these counterclaims to be a costly and challenging legal battle.
FTX’s Ongoing Debt Repayment Efforts
FTX’s debt repayment strategy involves various measures to raise funds. The asset auctions of its subsidiary and other holdings are crucial in generating liquidity. The exchange aims to repay its estimated $8 billion debt to clients and regain stability.
Hot Take: FTX Faces Challenges in Debt Repayment Amid Legal Disputes
FTX’s sale of its European arm back to its previous owners at a discounted price highlights the challenges the exchange faces in its debt repayment journey. With ongoing legal disputes and difficulties in defending against counterclaims, FTX must navigate complex legal proceedings while striving to gather enough liquidity through asset auctions. It remains to be seen how successful FTX will be in repaying its creditors and restoring stability to the exchange.
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