FTX plans to sell Digital Custody for $500,000 to file for bankruptcy protection

Author: Amaka Nwaokocha, CoinTelegraph; Compiled by: Deng Tong, Golden Finance

FTX Debtor Property, led by CEO John Ray III, has applied for a $500,000 A steep drop in dollars sells digital custody to CoinListwith financing provided by DC’s original CEO and seller, Terence Culver. FTX originally acquired Digital Custody for $10 million.

According to FTX’s legal filings, DC was acquired to provide custody services for FTX US and LedgerX. However, DC was not yet fully integrated into the FTX ecosystem before former CEO Sam Bankman-Fried filed for bankruptcy in November 2022, three months after acquiring DC. FTX acquired the company in two $5 million deals in December 2021 and August 2022.

FTX’s legal team also clarified that since FTX US has not yet restarted, Digital Custody has little value for the asset. It states that "given that the Debtors sold LedgerX and it is unlikely that the Debtors will sell or restart FTX U.S., the DCI is no longer useful to the Debtors' business."

However, DC still holds a license issued by the South Dakota Department of Banking hosting license. After evaluating three offers, including one from Culver, the Debtors selected the superior offer, its ability to complete the sale quickly and its favorable relationship with Culver, which it believed would facilitate prompt regulatory approval.

The FTX legal team mentioned that both the Committee and the FTX.com Non-U.S. Customers Ad Hoc Committee approved the transaction. However, as part of the agreement, FTX can seek higher bids for DC up to three days before delivery. If the buyer fails to complete the transaction, a reverse termination fee of $50,000 will be assessed.

Shuttered cryptocurrency exchange FTX has clarified that its restructuring plan does not include restarting the company, but instead focuses on repaying customers in full. During a court hearing on January 31, FTX attorney Andy Dietderich emphasized that despite the efforts, there are currently no plans to relaunch FTX.

This comes after numerous FTX users petitioned a U.S. bankruptcy judge to prevent the failed cryptocurrency exchange from using 2022 prices to value their cryptocurrency deposits. They claim this approach prevents them from benefiting from the recent surge in cryptocurrency prices.