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FTX’s sister trading firm Alameda has agreed to sell its interest in Sequoia Capital to a UAE-based entity.
Alameda Research appears set to sell its interest in Sequoia Capital to Abu Dhabi for $45 million. According to a recent report, the FTX sister trading firm agreed to sell the Sequoia stake to the Abu Dhabi sovereign wealth fund in cash.
A March 8th United States Bankruptcy Court for the District of Delaware document detailed the sale agreement between Alameda and Abu Dhabi. Part of this filing read:
“[FTX] decided to enter into the Agreement with Purchaser based on its superior offer and ability to execute the Sale Transaction within a short time frame.”
The document also revealed that FTX/Alameda agreed to sell to Abu Dhabi after mulling over interest from four different parties. Furthermore, the court document stated that Alameda’s share buyer, Al Nawwar Investments RSC Limited, is owned by the government of Abu Dhabi. According to reports, the United Arab Emirates-based buyer is already an investor in Sequoia.
The $45 million all-cash deal could close by the end of this month. However, the sale remains subject to approval by the Delaware court bankruptcy judge John Dorsey.
Alameda Decision to Sell Sequoia Interest to Abu Dhabi Is Part of Concerted FTX Efforts to Pool Funds for Creditor Payment
FTX’s attempt to offload its remaining interest in Sequoia Capital is one of a few plans the fallen company hopes will help pay off creditors. The Sequoia interest sale development also reflects concerted efforts by the Alameda/FTX insolvency management to recover assets and funds owned by the exchange.
Dorsey has presided over aspects of FTX’s legal cases following the exchange’s collapse and subsequent bankruptcy filing last November. The Delaware bankruptcy judge granted Bahamian-based FTX permission to sell off some of its assets following its insolvency declaration.
Assets listed for sale included FTX’s stock-clearing platform Embed, and its derivatives platform LedgerX. In addition, the sunken crypto exchange also sought to sell its regional branches, FTX Europe and FTX Japan.
In a related case, court documents revealed that Dorsey mandated defunct crypto brokerage company Voyager Digital to set aside $445 million. This ruling came on the heels of a lawsuit by Alameda Research against the company regarding loan repayments.
In January, reports stated that FTX recovered more than $5 billion in cash and liquid crypto assets amid its bankruptcy case. The embattled exchange revealed plans to rebuild its transaction history at the time. In addition, FTX also said that it was still trying to ascertain the total amount of customer shortfall.
FTX Sues Grayscale over Undue Exorbitant Management Fees
Earlier this week, FTX sued leading crypto asset management firm Grayscale Investments to access $9 billion of shareholder value. In the lawsuit, the once second-largest crypto exchange alleged that Grayscale had charged outrageous management fees. According to FTX:
“Grayscale has for years hidden behind contrived excuses to prevent shareholders from redeeming their shares. Grayscale’s actions have resulted in the Trust’s shares trading at approximately a 50% discount to Net Asset Value. If Grayscale reduced its fees and stopped improperly preventing redemptions, the FTX Debtors’ shares would be worth at least $550 million, approximately 90% more than the current value of the FTX Debtors’ shares today”.
However, Grayscale described FTX’s lawsuit as “misguided” and claimed transparency in obtaining regulatory approval to convert GBTC into an ETF.