By
Chimamanda U. Martha
April 19th, 2024
LedgerX may be the golden horse that gives FTX creditors hope of recovering some of their funds.
A potential sale of crypto derivative exchange, LedgerX, has attracted interest from multiple crypto firms. According to Bloomberg, at least ten companies have expressed interest in the sale.
The report lists Blockchain.com, Gemini, Bitpanda, Kalshi, and another unknown six companies as the companies that indicated interest. It is suspected that the other firms have signed non-disclosure agreements and could not be named.
Ledger X was acquired in October 2021 by FTX US and rebranded as FTX US Derivatives to allow FTX to provide its US customers with regulated crypto derivatives. Since then, the firm became central to Sam Bankman-Fried’s Washington efforts.
While it was initially thought to have also filed for Chapter 11 bankruptcy along with FTX and its other subsidiaries, CEO Zach Dexter denied it altogether. According to Dexter, LedgerX remains solvent and well-capitalized despite the FTX collapse.
The firm is regulated by the US Commodity Futures Trading Commission (CFTC) and may become FTX’s cash cow. According to CFTC chairman Rostin Behnam, the agency is communicating daily with LedgerX. The firm has also stopped using its rebranded name, FTX US Derivatives.
LedgerX Sale May Help Finance FTX Credit
LedgerX may be the golden horse that gives FTX creditors hope of recovering some of their funds. Bloomberg reports that the firm had about $303 million in cash as of a November 17 filing.
Recently, the firm set aside $175 million for use in the rapidly developing bankruptcy case. The funds were pulled from a $250 million fund set aside to clear derivatives. Before the FTX collapse, the firm was seeking a license to clear derivatives trade without intermediaries.
In the wake of the collapse, LedgerX withdrew its request and offered a portion of the funds for the bankruptcy proceedings. The money would prove helpful in settling some of the creditors who sought interim relief from the Bankruptcy court. A sale of the company may also make much-needed liquidity available to the company.
Some Subsidiaries Remain Solvent
Meanwhile, new FTX CEO, Mr. John J. Ray, maintains that some of its subsidiaries remain insolvent, the court could allow a global cash management system that would pay critical vendors and vendors at foreign subsidiaries.
Notably, Mr. Ray highlighted FTX Japan KK, FTX Turkey Teknoloji Ve Ticaret A.Ş., FTX EU Ltd, FTX Exchange FZE, and Quoine Pte. Ltd, and Zubr Exchange Ltd as being insolvent.