FTX Wants Dubai Unit Removed From U.S. Bankruptcy Proceedings

Liquidating FTX Dubai under UAE law would make way for the timely distribution of any outstanding liabilities, the bankrupt estate argued in court filings.

AccessTimeIconAug 3, 2023 at 8:26 a.m. UTC
Updated Aug 3, 2023 at 1:30 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bankrupt crypto exchange FTX wants to exclude its Dubai unit from the wind-down proceedings in the U.S., according to court filings from Thursday.

When FTX filed for bankruptcy in the U.S. last November, it started Chapter 11 cases for 102 associated entities from around the world. FTX Dubai, which was set up in February 2022 and which is owned by the company's European arm, was one of the entities roped into the proceedings.

But FTX Dubai didn't conduct any business prior to the bankruptcy filing in the United Arab Emirates and therefore "has no reasonable likelihood of rehabilitating its operations," the bankrupt estate argued in the filing requesting the dismissal of the unit.

"Additionally, FTX Dubai is balance sheet solvent. Therefore, the debtors believe that a solvent voluntary liquidation procedure in accordance with the laws of the United Arab Emirates would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets," the filing said.

The estate argues that any court orders while FTX Dubai was part of the proceedings should stand, but that the dismissal requested "is necessary" to protect the debtors and authorize them to, for instance, pay pre-bankruptcy wages and salaries, along with other compensation, benefits and expenses to Dubai employees.

A hearing on the matter is scheduled for Aug. 23.

Edited by Parikshit Mishra.

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 an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.


Learn more about Consensus 2024, 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.


Read more about