The acquisition of DC was made to provide custodial services for FTX US and LedgerX.
Digital Custody is not valuable to the estate since FTX US has not been reactivated.
John Ray III, CEO of the FTX debtors estate, has filed paperwork to sell Digital Custody to CoinList at a steep discount of $500,000, with funding coming from Terence Culver, the original CEO and seller of DC. At first, FTX paid $10 million to acquire Digital Custody.
The acquisition of DC was made to provide custodial services for FTX US and LedgerX, as stated in FTX’s court filing. Nevertheless, prior to former CEO Sam Bankman-Fried’s bankruptcy filing in November 2022—three months after purchasing DC, it was not completely integrated into the FTX ecosystem. The business was bought out by FTX in two separate $5 million deals in 2021 and 2022.
No Longer Useful to the Debtors
Digital Custody is not valuable to the estate since FTX US has not been reactivated, according to FTX’s legal team. Considering the Debtors’ sale of LedgerX and the low likelihood of selling or restarting FTX U.S., it asserts, “DCI is no longer useful to the Debtors’ business.”
Both the committee and the ad hoc committee of FTX.com’s non-U.S. clients authorized the deal, according to FTX’s legal team. Nevertheless, until three days before the close, FTX is allowed to seek a better offer for DC under the agreement. A $50,000 reverse termination charge will be levied in the event that the buyer is unable to finalize the contract.
The now-defunct cryptocurrency exchange FTX has made it clear that paying back clients in full is the primary goal of its restructuring efforts, rather than relaunching the company. At a court hearing on January 31, FTX attorney Andy Dietderich stressed that, despite several attempts, relaunching FTX is not on the cards.
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