December 8, 2022

Westside People

Complete News World

New FTX boss says crypto group will continue to reorganize or sell

New FTX boss says crypto group will continue to reorganize or sell

The new CEO of a collapsing cryptocurrency exchange has said FTX will try to sell or reorganize its business, as the company prepares to appear in US bankruptcy court.

“Based on our review over the past week, we are pleased to learn that many of FTX’s regulated or licensed affiliates, both in the US and abroad, have solvent balance sheets, responsible management, and valuable franchises,” said John Ray III.

Ray replaced FTX founder Sam Bankman Fried as CEO when dozens of the group’s subsidiaries filed for bankruptcy protection on November 11, after the company was unable to meet billions of dollars in withdrawal requests from clients.

FTX later said it believed it had more than 1 million creditors. He is scheduled to appear at a preliminary hearing in Delaware bankruptcy court on Tuesday.

“[I]It will be our priority in the coming weeks to explore sales and recapitalization or other strategic transactions in relation to these subsidiaries,” Ray said.

FTX asked the court to allow it to keep the names and identities of its creditors secret, arguing that FTX had no traditional debt holders and that disclosing its clients would disadvantage it competitively.

“Public publication of a list of debtors’ clients could give debtors’ competitors an unfair advantage to contact and exploit these clients,” FTX said.

FTX sought bankruptcy court permission to pay the third-party vendors it said were necessary to keep its operations running as it attempted to reorganize. Among these are software providers as well as companies that provide security and storage of crypto assets. FTX initially asked the court to approve $9 million in the sellers’ payments.

See also  Stock futures are flat after Monday's gains

In a separate filing, FTX asked the court to approve a new cash management system. She said she had confirmed cash holdings of $565 million, but since she had only been able to check balances in 144 of her 216 known bank accounts, she “did not yet know the total amount of cash.” [it] Catch[s]”.

FTX announced that the company has retained Perella Weinberg Partners as its investment banker to work alongside attorneys at Sullivan & Cromwell and advisors from Alvarez & Marsal.

Ray cited FTX’s two US subsidiaries, Embed Clearing and LedgerX, as well as units in Japan, Turkey and the UAE as attractive assets. The US arm of FTX bought Embed Clearing, a brokerage and infrastructure provider, in June. It acquired LedgerX, an American derivatives platform, last October.

In a lawsuit Thursday, Ray detailed the mess at Bahamas-based FTX, calling the “complete failure of the company’s controls and . . . the complete absence of trustworthy financial information.”

Two prominent cryptocurrency companies have filed for bankruptcy this year, Voyager Digital and Celsius Holdings. Like FTX, each of them has tried to reorganize or sell itself rather than immediately seek liquidation. Voyager has inked a deal to sell itself to FTX, but it’s unlikely to move forward given FTX’s current problems.

Ray pledged to investigate allegations of misconduct against Bankman-Fried and other executives.

Bankruptcy Court Judge John Dorsey will be asked on Tuesday to intervene in a brewing battle between Rye and the Bahamas.

The island nation sought to maintain jurisdiction with respect to FTX Digital, which is a subsidiary of FTX and is not one of the entities that filed for bankruptcy in Delaware. FTX Digital is facing liquidation proceedings in the Bahamas.

See also  Walmart-owned Sam's Club raises annual membership fees for the first time in 9 years

FTX wrote in a lawsuit earlier this week that there was “credible evidence that the government of The Bahamas is responsible for directing unauthorized access to debtors’ systems for the purpose of acquiring debtors’ digital assets – which occurred after the initiation of these [bankruptcy] cases”.

In a statement on Thursday, the Bahamas Securities Commission said that on November 12 it “took action to direct the transfer of all digital assets of FTX Digital Markets Ltd to a digital wallet controlled by the Commission, for safekeeping.”