FTX Cleared to Sell LedgerX, Japanese Units by Bankruptcy Judge

The collapsed exchange is looking to sell off its more separable and solvent assets as it seeks to repay creditors.

AccessTimeIconJan 13, 2023 at 6:38 a.m. UTC
Updated Jan 13, 2023 at 3:48 p.m. UTC
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

FTX can put four key units including derivatives arm LedgerX and stock-clearing platform Embed up for sale, a Delaware bankruptcy judge ruled Thursday.

Investment bank Perella Weinberg is now allowed to start the sale process, which also includes the crypto exchange’s European and Japanese units, and which have already attracted as many as 117 expressions of interest.

In formal terms, the judicial decision allows bids, an auction, and a sales hearing to take place, with permission for any actual transaction to come later. Judge John Dorsey of the Delaware Bankruptcy Court, charged with overseeing the wind-up of the exchange, approved the measures in an order dated Thursday after a hearing held Wednesday. Sale notices will be published within around three business days, with indications of interest to be received between Jan. 18 for Embed and Feb. 1 for FTX Europe and Japan.

During Wednesday's hearing, Dorsey characterized the process as FTX "trying to dip their toe into the water to see what happens [and] see what kind of interest they receive."

Sam Bankman-Fried’s crypto enterprise filed for bankruptcy on Nov. 11, 2022, shortly after a CoinDesk report scrutinized the integrity of FTX trading arm Alameda Research’s balance sheet.

Claims linked to former senior executives and their families will be excluded from the sale, given concerns from the Department of Justice about sales where there have been serious allegations of wrongdoing. Bankman-Fried has pleaded not guilty to charges including wire fraud while serving as chief executive officer, while his former lieutenants Caroline Ellison and Gary Wang are said to be cooperating with investigators.

The estate, now run by restructuring expert John Ray, hopes to generate more value for creditors by speedily selling off the more solvent and easy-to-separate arms of the business.

UPDATE (Jan. 13, 10:49 UTC): Clarifies the judge's ruling allows the sales procedure to begin, and adds Judge John Dorsey's comment in fourth paragraph.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.


Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


CoinDesk - Unknown

Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.