FTX Files Motion to Remove Dubai Unit from Bankruptcy Proceedings
Bankrupt cryptocurrency exchange FTX has submitted a motion to exclude its Dubai unit from the ongoing bankruptcy proceedings in the United States. FTX Dubai did not conduct any business activities in the UAE before filing for bankruptcy and is unlikely to resume operations.
Main Breakdowns:
- FTX Dubai failed to offer any crypto-related services in the UAE after securing a license
- FTX believes the Dubai arm should face a solvent voluntary procedure instead
- FTX Dubai currently holds approximately $4.5 million in its accounts
- Dismissing the Dubai unit from bankruptcy proceedings would not affect creditors’ claims
- FTX plans to restart operations catering only to offshore customers, not investors in the U.S.
In order to protect the rights and claims of the Debtors, FTX Dubai is expected to enter into an agreement with the appointed liquidator to harmonize and coordinate the activities of the liquidation. FTX aims to distribute any positive cash balance after paying outstanding liabilities and liquidating assets according to UAE laws.
Hot Take:
FTX’s motion to remove its Dubai unit from bankruptcy proceedings highlights the unit’s lack of business activity and low likelihood of rehabilitation. This move allows FTX to focus on restarting operations for offshore customers while creditors can pursue their claims during the voluntary liquidation proceedings in the UAE.