The FTX debtors estate, led by CEO John Ray III, has initiated the process of selling Digital Custody to CoinList at a significant markdown of $500,000, with financing provided by the original CEO of DC, Terence Culver. FTX had initially acquired Digital Custody for $10 million.
Digital Custody was acquired by FTX to offer custodial services for FTX US and LedgerX. However, the integration of DC into the FTX ecosystem was incomplete before former CEO Sam Bankman-Fried filed for bankruptcy in November 2022, just three months after acquiring DC. FTX had purchased the company in two transactions totaling $10 million in December 2021 and August 2022.
FTX’s legal team clarified that since FTX US has not been restarted, Digital Custody holds little value for the estate. Therefore, the sale of DC was deemed necessary. Despite holding a custodial license from the South Dakota Division of Banking, DC’s utility for the debtors’ business has diminished.
After evaluating multiple offers, including one from Terence Culver, the debtors selected CoinList’s offer due to its capability to complete the sale quickly and a beneficial relationship with Culver, which is expected to facilitate regulatory approval. Both the committee and the ad hoc committee of non-U.S. customers of FTX.com approved the transaction.
FTX clarified in a court hearing on Jan. 31 that its restructuring plans do not involve a reboot of the firm but rather focus on repaying customers in full. Despite extensive efforts, there are no plans to relaunch FTX.
Several FTX users have raised concerns and requested a U.S. bankruptcy judge to prevent the collapsed exchange from assessing their cryptocurrency deposits using 2022 prices, arguing that this approach prevents them from benefiting from the recent surge in crypto prices.
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