2024

David

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Bankrupt crypto exchange FTX has filed legal papers proposing the sale of its subsidiary, Digital Custody, to CoinList for $500,000. 
The price tag is in stark contrast to the initial $10 million FTX spent to buy Digital Custody back in 2021 — a 95% markdown. 
The crypto exchange intended Digital Custody to be a key asset in providing custodial services to its U.S. operations, FTX US and LedgerX. 
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 FTX file motion to sell Digital Custody for $500k which FTX bought for $10m to Terrence Culver (person who sold DCI to FTX for $10m) A&amp;M (UCC/Ad hoc agrees) says this reflects a fair price for the valuable license from South Dakota that allows it to provide custody <a href="https://t.co/QZ8XGVoHQ8" target="_blank">pic.twitter.com/QZ8XGVoHQ8</a>— Sunil (FTX Creditor Champion) (@sunil_trades) <a href="https://twitter.com/sunil_trades/status/1756221342049853859?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">February 10, 2024</a>
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However, Digital Custody never fully synced with FTX’s operations before the bankruptcy filing by former CEO <a href="https://crypto.news/ftx-saga-what-happened-to-ftx/" target="_blank" data-type="link" data-id="https://crypto.news/ftx-saga-what-happened-to-ftx/" rel="noreferrer noopener">Sam Bankman-Fried</a> in November 2022. 
With FTX US still moribund and LedgerX sold off, the legal team argued in its <a href="https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MzA1OTc3Ng==&amp;id2=-1" target="_blank" rel="noreferrer noopener">filing</a> that Digital Custody’s role is effectively redundant, spurring the decision to divest at a deep discount. 
The proposed sale to CoinList is expedited by a favorable existing relationship with Digital Custody’s original CEO, Terence Culver, something FTX’s lawyers believe will help smooth regulatory pathways.&nbsp; 
To reflect the urgency of their circumstances, the team has even incorporated a provision for a reverse termination fee of $50,000, demonstrating a commitment to a swift and decisive closure of the sale. 
 You might also like: <a href="https://crypto.news/ftx-lost-400m-worth-of-crypto-due-to-sim-swap-attack-doj-says/"> FTX lost $400m worth of crypto due to SIM-swap attack, DOJ says </a> 
<h2 class="wp-block-heading" id="strong-ftx-asset-liquidation-gathers-pace-strong">FTX asset liquidation gathers pace</h2> 
This move comes barely a week after FTX started exploring strategic options for its 8% interest in the AI firm Anthropic Holdings. CEO John J. Ray III is assessing the feasibility of holding an auction or proceeding with a private sale to <a href="https://crypto.news/ftx-seeks-expedited-court-approval-to-sell-1-4b-anthropic-stake/" target="_blank" rel="noreferrer noopener">divest</a> this asset. 
Anthropic Holdings, noted for specializing in advanced language models akin to GPT-3 and recognized as a Delaware public benefit corporation, received a staggering <a href="https://www.bloomberg.com/news/articles/2023-12-21/anthropic-in-talks-to-raise-750-million-led-by-menlo-ventures" target="_blank" rel="noreferrer noopener">valuation</a> of $18 billion in the last fiscal quarter of 2023. This valuation positioned FTX’s stake at an estimated $1.4 billion. 
Furthermore, the embattled exchange is setting the stage to liquidate its $175 million claim against the insolvent crypto lender Genesis Global Capital—a claim currently circulating at a premium discount in the market. 
<h2 class="wp-block-heading" id="strong-questions-arise-about-fair-settlement-for-ftx-creditors-strong">Questions arise about fair settlement for FTX creditors</h2> 
Amid these liquidation maneuvers, FTX’s legal counsel Andrew Dietderich expressed confidence to a bankruptcy <a href="https://www.youtube.com/watch?v=jHbFL9M7Cgo" target="_blank" rel="noreferrer noopener">court</a> that sufficient financial resources are in place to satisfy all verified customer and creditor claims fully. 
However, the nuances of these settlements remain to be fully disclosed, with the volatile nature of bankruptcy claims in secondary trading contributing to the complexity. 
There’s <a href="https://crypto.news/ftx-aims-for-full-customer-repayment-halts-revival-efforts/" target="_blank" rel="noreferrer noopener">reportedly</a> an ambivalence among many FTX customers, who contest the methods used to appraise their claims, especially regarding cryptocurrency assets that were “dollarized” at low market values during the platform’s collapse but have since rallied significantly. 
Acknowledging the discontent, Dietderich maintained that the conversion to dollar terms was consistent with bankruptcy protocol — a stance validated by Judge John Dorsey’s ruling on the fairness of the claims estimation methodology. 
 Read more: <a href="https://crypto.news/larry-david-admits-losing-a-lot-in-crypto-calls-himself-idiot-after-ftx-collapse/"> Larry David admits losing ‘a lot’ in crypto, calls himself ‘idiot’ after FTX collapse </a>

FTX to divest Digital Custody to CoinList at major loss

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