FTX files in bankruptcy court to sell four of its businesses
FTX was once valued at $32 billion
Dorsey & Whitney partner Thomas Gorman joins 'Cavuto: Coast to Coast' to discuss the bipartisan bill on crypto money laundering and crypto industry regulations following the FTX collapse.
FTX, formerly one of the largest cryptocurrency exchanges in the world, is seeking to sell four of its businesses.
In a filing submitted Thursday to the Delaware bankruptcy court, FTX said it is soliciting bids for Embed Financial Technologies, LedgerX, FTX Japan and FTX Europe.
According to the filing, the cryptocurrency exchange said the four businesses have "experienced regulatory pressures which merit an expeditious sale process," as well as "significant customer and employee attrition pressures," according to the filing.
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Representations of cryptocurrencies are seen in front of an FTX logo and decreasing stock graph in this illustration from Nov. 10, 2022. (Reuters/Dado Ruvic/Illustration/File Photo / Reuters Photos)
"Because each of the Businesses was acquired by the Debtors fairly recently, but before the Debtors commenced these Chapter 11 Cases, the Businesses have each operated on a generally independent basis from the Debtors’ other operations, holdings and investments," the filing stated.
"The relative independence of each of the Businesses’ operations from the remainder of the Debtors’ core business operations make a potential sale process for each of the Businesses relatively less complex."
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FTX has received "significant interest expressed by third parties" about acquiring the units and determined "pursuing one or more sales of the Businesses is important to preserve and maximize the value of the Debtors’ estates," according to the filing.
The court document included a detailed outline of how bidding and auctioning the businesses would work, including deadlines for submitting bids, conducting auctions and holding hearings to consider any sales.
This illustration photo shows a smartphone screen displaying the logo of FTX, the crypto exchange platform, with a screen showing the FTX website in the background Feb. 10, 2022. (Olivier Douliery /AFP via Getty Images / Getty Images)
FTX, once valued at $32 billion, filed for Chapter 11 bankruptcy in November along with Alameda Research, West Realm Series and 130 affiliated companies. At the same time, founder Sam Bankman-Fried stepped down as the crypto exchange’s CEO, handing over the position to former Enron liquidator John J. Ray III.
Authorities arrested Bankman-Fried in the Bahamas earlier in the week. He has since been hit with charges from the Southern District of New York and the Securities and Exchange Commission.
Sam Bankman-Fried, co-founder and CEO of FTX, in Hong Kong, China. (Lam Yik/Bloomberg via Getty Images / Getty Images)
Bankman-Fried is accused of "perpetuat[ing] a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds," according to the Department of Justice’s press release.
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He allegedly used customer funds for "his personal use to make investments and millions of dollars of political contributions to federal political candidates and committees and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency hedge fund also founded by the defendant," the release said.