FTX is Looking to Sell Four Companies, Including LedgerX

Lawyers of cryptocurrency exchange FTX are seeking permission to sell four of its subsidiaries before they lose any more of their value due to their connection to the bankrupt company.

Court documents filed with the Bankruptcy Court of Delaware on 15 December revealed that FTX is looking to auction four of its subsidiaries, namely LedgerX, FTX Europe, FTX Japan, and Embed Business. The company’s lawyers argued that these businesses have been under regulatory pressure ever since FTX filed for bankruptcy, which would “merit an expeditious sale process” before they lose their value. The documents read:

“The licenses held by FTX Europe have been suspended along with its operations, and FTX Japan is subject to business suspension and business improvement orders. The longer operations are suspended, the greater the risk to the value of the assets and the risk of a permanent revocation of licenses.”

The filing also claims that these businesses were recently acquired by FTX, and had been operating relatively independent of the exchange, meaning they could resume operations after their sale and maximize the value to the FTX estate. LedgerX, for example, was one of the few companies that remained solvent after the collapse of FTX, with CFTC Chairman Rostin Behnam noting it “held more cash than all the other FTX debtor entities combined”.

FTX wishes to sale these four subsidiaries quickly, and if the bankruptcy court gives its permission, the auction for Embed could start as early as 21 February. The auction for the other three companies was proposed for March 2023. The lawyers have also claimed that FTX had received “dozens of unsolicited” bids for the businesses, and that FTX has already entered into 26 confidential agreements with potential buyers.