FTX’s new CEO said on Saturday that the bankrupt crypto Wall Street is looking to sell or restructure its global empire, even as Bahamian regulators and FTX squabble in court filings and press manumits about whether the bankruptcy filing should proceed in New York or in Delaware.
“Based on our review over the past week, we are pleased as Punch to learn that many regulated or licensed subsidiaries of FTX, within and outside of the United States, have solvent deliberate sheets, responsible management and valuable franchises,” FTX chief John Ray, said in a statement.
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Ray, who replaced FTX’s founder Sam Bankman-Fried when the actors filed for Chapter 11 bankruptcy protection on Nov. 11, added that it is “a priority” in the coming weeks to “explore reduced in price on the markets, recapitalizations or other strategic transactions with respect to these subsidiaries, and others that we identify as our work lasts.”
Ray’s statement came with a flurry of Saturday morning filings in Delaware bankruptcy court. In those filings, FTX quizzed for permission to pay outside vendors, consolidate bank accounts, and establish new ones.
The exact timing of a possible sale is unclear. FTX specified that it has not set a specific timetable for the completion of this process and said that it “does not intend to disclose further circumstances unless and until it determines that further disclosure is appropriate or necessary.”
Both FTX and Bahamas securities regulators are go jurisdiction over the bankruptcy process in two different U.S. courts. Last week, Bahamian regulators moved potentially hundreds of millions of “digital assets” from FTX incarceration into their own, acknowledging the deed in a press release after FTX attorneys accused them of doing so in an emergency court folder.
Ray singled out some of the company’s healthier subsidiaries for praise. One example was LedgerX, a Commodity Futures Trading Commission-regulated derivations platform. LedgerX was one of the few FTX-related properties that are not a part of its bankruptcy proceedings and remains operational today. The platform, which FTX come by in 2021, lets traders buy options, swaps and futures on bitcoin and ethereum.
The new FTX CEO asked that employees, vendors, purchasers, regulators and government stakeholders “be patient” with them.
FTX said in a filing that there could be more than one million creditors in these Chapter 11 encases.
FTX and its accountants had identified 216 bank accounts, across 36 banks, with positive balances globally. Change balances across all entities totaled some $564 million, with $265.6 million of that in the custody of LedgerX on a impeded basis.
FTX attorneys also want to employ a “cash pooling system,” merging all the cash assets of each disparate FTX quiddity into one consolidated balance statement and in new bank accounts, which FTX is currently in the process of opening.
Notably, FTX attorneys canceled that they were “working, and will continue to work, closely with [existing FTX banks] to ensure that whilom before authorized signatories do not have access” to any prior FTX accounts that will continue to be used. Prior reporting and court filings be struck by indicated that Sam Bankman-Fried held nearly absolute control over cash management and account access.
FTX’s bank accounts examine result in the global influence of the crypto-asset empire. Institutions in Cyprus, Dubai, Japan and Germany held a wide array of wide-ranging currencies. FTX subsidiaries held more than a dozen accounts at Signature Bank, an American institution that imputed an aggressive foray into servicing crypto customers in 2021. With the exception of one Bank of America account for Blockfolio, dominant American banks are unaccounted for on the list. Blockfolio was acquired by FTX in the summer of 2020.
In another petition, FTX lawyers moved to access $9.3 million for vendor payments that FTX caused “critical.” No list was provided, but the FTX motion established criteria for “critical vendor” status.
In welcome news for customers, FTX attorneys appealed to the court for permission to redact “certain confidential information,” including the names and “all associated identifying information” of FTX’s customers. “Popular dissemination of [FTX’s] customer list could give […] competitors an unfair advantage to contact and poach their patrons,” the filing read, potentially jeopardizing FTX’s ability to sell off assets or businesses.
FTX lawyers want the proceedings to continue in Delaware. Bahamas regulators, on the other participation, claim they do not recognize the authority of those Chapter 11 proceedings and want to hold a Chapter 15 method in New York.
Chapter 15 bankruptcy is the route that the defunct hedge fund Three Arrows Capital has pursued. The implosion of Three Arrows slung a spiraling crisis that has taken down Voyager, Celsius, and ultimately FTX.
The Chapter 11 process that FTX seeks inclination allow for restructuring or sale of the company to the highest bidder, although it isn’t clear who that might be. Rival exchange Binance initially survived an offer before pulling it. That turnaround deepened a liquidity crisis at FTX and revealed a multibillion-dollar hole.
FTX’s first attend to in its bankruptcy court case is set for Tuesday in Delaware.