FTX’s Fallen Asset

FTX, which filed for bankruptcy in late 2022, has decided to let go of Digital Custody, an asset initially intended to bolster its US custodial services, including FTX US and LedgerX. However, the integration of Digital Custody into FTX’s operations never fully materialized, leading to its current status as an expendable asset amid the company’s restructuring.

Strategic Divestment to CoinList

The decision to divest comes as FTX US lies dormant and its former subsidiary LedgerX has been sold off. By selling to CoinList, FTX leverages a pre-existing relationship with Digital Custody’s original CEO, Terence Culver. This relationship is anticipated to facilitate smoother regulatory approval processes for the sale.

Urgency in Liquidation

Reflecting the dire need for a quick resolution, FTX’s legal team has proposed a reverse termination fee of $50,000. This move underscores the urgency with which FTX is approaching the liquidation of its assets, as it seeks to settle outstanding debts and streamline its operations.

Wider Liquidation Efforts

FTX is not stopping at Digital Custody; the company is actively looking to offload other high-value assets, including its 8% stake in AI firm Anthropic Holdings and a $175 million claim against Genesis Global Capital. These efforts are part of a broader strategy to address the financial claims of customers and creditors in the wake of the exchange’s collapse.

Settlement Controversies

Despite assurances from FTX’s legal counsel that there are ample funds to cover verified claims, the methodology for appraising those claims—particularly in cryptocurrency—has been met with skepticism by some customers. The issue stems from the valuation of assets at the time of the exchange’s fall, which were significantly lower than their current market values.

Conclusion

The saga of FTX’s bankruptcy continues to unfold, with each asset sale bringing new developments and challenges. While the sale of Digital Custody to CoinList marks a significant loss for FTX, it also represents a step towards resolving the complex web of financial obligations left in the wake of its collapse.