Bankrupt FTX Proposes Sale of Digital Custody to CoinList for $500,000
Bankrupt crypto exchange FTX has filed legal papers suggesting the sale of its subsidiary, Digital Custody, to CoinList for $500,000. This price is significantly lower than the $10 million that FTX initially paid for Digital Custody. The exchange had intended for Digital Custody to provide custodial services to its U.S. operations, but it never fully integrated with FTX before former CEO Sam Bankman-Fried filed for bankruptcy in November 2022.
FTX’s legal team argues that Digital Custody has become redundant due to the moribund state of FTX US and the sale of LedgerX. The proposed sale to CoinList is expedited by an existing relationship with Digital Custody’s original CEO, Terence Culver, which is expected to facilitate regulatory processes.
The legal team has also included a provision for a reverse termination fee of $50,000 to ensure a swift closure of the sale.
FTX Accelerates Asset Liquidation
In addition to the proposed sale of Digital Custody, FTX is exploring options for its 8% interest in Anthropic Holdings, an AI firm specializing in advanced language models. The exchange is considering holding an auction or conducting a private sale to divest this asset, which was valued at $1.4 billion based on Anthropic Holdings’ $18 billion valuation in the last quarter of 2023.
Furthermore, FTX is preparing to liquidate its $175 million claim against the insolvent crypto lender Genesis Global Capital. This claim is currently trading at a premium discount in the market.
Concerns Arise Over Fair Settlement for FTX Creditors
FTX’s legal counsel has expressed confidence in the availability of sufficient financial resources to fully satisfy verified customer and creditor claims. However, the details of these settlements have yet to be fully disclosed, and the complexity is exacerbated by the volatile nature of bankruptcy claims in secondary trading.
Some FTX customers are contesting the valuation methods used for their claims, particularly regarding cryptocurrency assets that were undervalued during the platform’s collapse but have since increased significantly in value. The conversion of these assets to dollar terms was deemed consistent with bankruptcy protocol by Judge John Dorsey.
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