By Now-defunct crypto exchange FTX is set to sell one of its Digital Custody Inc. (DCI) unit for a fraction of its original price.
DCI, which was purchased by FTX for $10 million in August 2022, will now be sold to the token sale platform CoinList for a mere $500,000.
Initially, FTX acquired DCI to provide custodial services for FTX.US and U.S.-based LedgerX.
However, due to the collapse of the FTX empire, DCI was never integrated into either operation.
DCI’s Operations Declines After Sale of LedgerX
Following the sale of LedgerX and FTX’s decision not to restart or sell its exchange, DCI’s operations dwindled, according to a court filing.
Nevertheless, DCI still holds value as it possesses a custody license from South Dakota.
The bankruptcy filing said that a prompt sale of the DCI unit would help FTX defray or avoid further operational expenses associated with it.
“DCI is also no longer useful to the Debtors’ business given the Debtors’ sale of LedgerX and that it is unlikely for the Debtors to sell or restart FTX US,” the filing added.
FTX Plans to Divest Digital Custody to CoinList at Significant Loss
Bankrupt cryptocurrency exchange FTX is taking steps to sell its subsidiary, Digital Custody, to CoinList for a mere $500,000.
This proposed sale represents a substantial loss compared to the initial…
— makk (@makk_jusr22) February 12, 2024
Rather than holding an auction, FTX debtors have chosen to consider higher bids from other interested parties up to three days before the sale hearing.
However, after evaluating other offers, FTX debtors determined that the sale to CoinList and Dicital Custody CEO, Terrence Culver, would be the most favorable outcome.
This decision was influenced by Culver’s instrumental role in securing DCI’s custody license in South Dakota and his ability to execute the purchase swiftly.
Culver will provide financing to CoinList through convertible notes for the acquisition.
The deal includes a $50,000 break-up fee in the event of a failed transaction.
FTX Aims to Repay All Creditors
FTX has expressed its intention to repay all its creditors and has been actively seeking to divest some of its subsidiaries as part of the ongoing bankruptcy process.
Recently, the exchange sought approval to sell its 8% stake in AI startup Anthropic Holdings.
In a motion filed by FTX’s current CEO, the exchange requested permission to sell the stake and proposed two possible procedures, including an auction or a private sale.
The exchange also requested a shortened period for objections to be raised, with a court hearing scheduled for February 22 to expedite the deliberation process.
The precise price sought for the Anthropic shares has been redacted from the filing, as FTX’s legal team believes public disclosure could hinder the potential to obtain higher offers for the stake.
Anthropic Holdings achieved a reported valuation of up to $18 billion in December 2023, indicating that FTX’s 7.84% stake could be worth approximately $1.4 billion.
Digital Custody’s sale at a significantly reduced price reflects FTX’s efforts to restructure and address its financial obligations amidst the fallout from its bankruptcy. As the process continues, FTX remains committed to resolving its debts and finding viable solutions for its remaining assets.
Earlier this month, the platform also filed a motion in a Delaware court to sell its $175 million claim against bankrupt digital financial services firm Genesis Global Capital.
The post From $10M to $500K: FTX Slashes Digital Custody Unit Price in Post-Collapse Sale appeared first on Cryptonews.
