After entertaining the possibility of restarting FTX after the bankruptcy process for some time, lawyers for the defunct exchange announced that that plan has now been scrapped, and the company will only be dissolved once all debts have been paid. debt.
Andrew Dietrich, one of the lawyers representing FTX in the court case, stated that although the payment of the creditors in full is not yet guaranteed, it is a goal that can certainly be achieved.
Creditors will only receive the dollar value of their crypto holdings. This can be frustrating for investors, as the value of assets has increased since the exchange went down. However, it is precisely this development that allows for full refunds in advance. Additionally, the solution is legally sound and consistent with bankruptcy law.
Selling the Company Back to the Previous Owner
While the company’s lawyers are getting closer to counting the funds to be paid, they have already sealed another deal to sell an entity owned by FTX.
In this case, Digital Custody Inc., a Delaware-based company with a license in South Dakota that allows the custody of digital assets, will be sold for only $500,000 on CoinList. The funds will be provided by the CEO of CoinList, a man named Terrence Culver.
However, there is a catch: Terence Culver is also the person who originally sold Digital Custody to FTX for a total of $10 million.
FTX files motion to sell Digital Custody for $500k that FTX purchased for $10m to Terrence Culver (person who sold DCI to FTX for $10m)
A&M (UCC/Ad hoc agreed) says it has shown a fair price for the valuable license from South Dakota that allows it to provide custody. pic.twitter.com/QZ8XGVoHQ8
— Sunil (FTX Creditor Champion) (@sunil_trades) February 10, 2024
The sale was made through two separate transactions, each valued at $5 million, one in December 2021 and one in August 2022.
Digital Assets “No FTX US Use”
At that time, FTX US purchased the company to facilitate custody of clients’ own and assets within the US.
However, asset custody is no longer a concern for FTX as it will cease business as soon as all debts are paid.
“DCI will no longer be available to the Debtors’ business due to the Debtors’ sale of LedgerX and that it is unlikely for the Debtors to sell or restart FTX US. As a result, the sale or transfer of Interests pursuant to the proposed Sale Transaction in a private sale is the most efficient and effective way to minimize the costs of the estates while maximizing the value for the benefit of the estates. land.
Committees representing FTX’s non-US creditors also signed off on the sale. FTX may continue to search for the best deals until well before the sale date.
If the buyer backs out of the deal, a reverse termination fee of $50k will be collected.
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