FTX to Sell or Restructure Global Empire, According to CEO

UTC by Tolu Ajiboye · 3 min read
FTX to Sell or Restructure Global Empire, According to CEO
Photo: Depositphotos

Following its epic collapse, FTX now looks to restructure or sell out to the highest bidder amid investigations and bankruptcy filings.

According to new FTX CEO John Ray, the embattled crypto exchange plans to sell or restructure its global empire, seemingly the only course of events possible. Part of a statement issued by the company’s new chief read:

“Based on our review over the past week, we are pleased to learn that many regulated or licensed subsidiaries of FTX, within and outside of the United States, have solvent balance sheets, responsible management and valuable franchises.”

Speaking on the need for FTX to consider “sales, recapitalizations or other strategic transactions with respect to [its] subsidiaries,” Ray further stated:

“I have instructed the team at the FTX Debtors to prioritize the preservation of franchise value as best we can in these difficult circumstances.”

In addition, the new FTX CEO also implores all vendors, employees, regulators, customers, and government stakeholders to be patient with the process.

FTX Sell & Restructure Plans Only Recourse for Bankrupt Crypto Firm

Ray’s “sell and restructure” statement comes following the bankruptcy filing by FTX. Amid several ongoing governmental investigations in the US and the Bahamas – where FTX is based, are also arguments on the bankruptcy filing location. Even as the fallen exchange squabbles with Bahamian regulators in a court filing, press releases about whether the bankruptcy filing should happen in New York or Delaware abound. In a recent Delaware bankruptcy court filing, FTX requests permission to pay external vendors, strengthen bank accounts, and create new ones.

However, the exact timing of a possible sale by the company is not precise, and FTX does not have a specific timetable for the sale process. In addition, the beleaguered company only intends to reveal further developments when necessary. However, the general assumption is that the planned restructuring or sale of FTX will go to the highest bidder.

Just before the FTX collapse, rival exchange Binance came closest to rescuing the Bahamian-based crypto exchange.

FTX Identifies Operational Subsidiary LedgerX

Amid the mass of debt-ridden FTX subsidiaries are a few operational ones that are not part of its bankruptcy proceedings, according to Ray. These include LedgerX, a derivatives platform regulated by the Commodity Futures Trading Commission (CFTC). FTX acquired LedgerX in October last year to facilitate buying Bitcoin (BTC) and Ethereum (ETH) options, swaps, and futures. Furthermore, FTX accountants previously checkmarked 216 bank accounts in 36 banks globally, all with positive balances.

However, regarding its Chapter 11 bankruptcy filing, FTX estimates more than one million creditors. The exchange’s attorneys plan to use a “cash pooling system” to merge all the cash assets of each separately independent entity into a consolidated bank statement. In addition, FTX intends to open new bank accounts for a combined funds’ pooling system it is currently working on.

FTX lawyers applied to the court for permission to protect the identity of its customers by redacting certain confidential information. This is because the company argues that publicly disseminating its client list could grant competitors an unfair advantage to poach their customers.

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Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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