In the annals of cryptocurrency history, 2022 will be remembered as the year of failures and bankruptcies. A number of well-known companies, including FTX, 3 Arrows Capital, Celsius, Terraform Labs, Voyager, and Vauld, as well as Genesis, and Alameda Research, have all bowed out. Investors had to face the weight of their breakdown, which shattered the entire crypto industry.
The United States Bankruptcy Court received a motion from FTX’s legal team on December 15 asking for authorization to sell the company’s European and Japanese operations, LedgerX derivatives exchange, and Embed stock-clearing platform.
The attorneys state that each of these companies has experienced regulatory pressure, which “merits[s] an expeditious sale process,” adding,
“The longer operations are suspended, the greater the risk to the value of the assets and the risk of a permanent revocation of licenses.”
FTX Japan’s operations suspended?
While FTX Europe had its activities and licenses suspended, the firm’s Japan branch is currently subject to business suspension and improvement orders.
They also point out the decline in clients and personnel the companies have seen since the firm declared bankruptcy on November 11 and contend that selling them now would enable a return to profitability and maximize value for the firm’s estate.
The attorneys claimed that because these companies were recently bought and had been operating mostly independently of FTX, selling them would be a lot simpler procedure.
If there are multiple interested parties, Embed would be the first business up for auction on February 21, 2023, followed by the other three the following month.
The 134 companies involved in the bankruptcy procedures are claimed to be attractive to more than 110 parties, and the firm has already signed 26 confidentially agreements with parties interested in FTX’s businesses or assets.
Particularly during the firm’s bankruptcy proceedings, LedgerX has been hailed as a success story. Rostin Behnam, chairman of the Commodity Futures Trading Commission, noted that the company had essentially been “walled off” from other businesses within the FTX Group and “held more cash than all the other FTX debtor entities combined.”
FTX claims it is in the best interests of all stakeholders to sell off a portion of its bankrupt cryptocurrency enterprise before it loses too much of its value or has its licenses permanently revoked.