Bankrupt crypto exchange FTX plans to liquidate one of its subsidiaries, Digital Custody, Inc. (DCI), to sell to CoinList at a huge discount.
New court documents to reveal that FTX DCI, which it planned to use to provide custody services to FTX.US and LedgerX customers, will sell to crypto exchange CoinList for just $500,000 after acquiring it for more than $10 million in 2022 – a price reduction of 95%.
“The seller has acquired DCI, a trust company registered in South Dakota, to provide custody services for cryptocurrencies and other digital property for FTX.US, the U.S. cryptocurrency spot trading exchange, and non-Debtor LedgerX, the Debtors’ digital currency futures exchange and clearinghouse.
Given the timing of the acquisition, DCI was never integrated into FTX.US or LedgerX’s operations prior to the commencement of these Chapter 11 cases. Following the commencement of these Chapter 11 cases, the debtors sold their interest in LedgerX in May 2023. The debtors also never sold or restarted the FTX.US exchange.”
According to the documents, CoinList (buyer) and two other companies initially expressed interest in acquiring DCI late last year, with the crypto exchange ultimately securing the deal.
“Ultimately, on December 15, 2023, the debtors received an indication of interest from three parties, including an indication of interest from the buyer. The debtors of these three potential buyers have transferred [the] buyer and conducted negotiations in good faith with [the] buyer with regard to the terms of the agreement.”
FTX collapsed in November 2022 after it emerged that its disgraced founder and former CEO, Sam Bankman-Fried, had mishandled billions of dollars in customer funds and funneled them to Alameda Research, FTX’s sister company, to make risky bets on digital assets. .
Bankman-Fried was found guilty of all seven charges against him in 2023.
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Featured image: Shutterstock/X-Poser