FTX to Sell Solvent Units

The embattled crypto exchange filed a petition to begin an auction process for several subsidiaries it says are solvent while they’re still valuable.

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In a motion filed Thursday evening, lawyers representing FTX argued that it was a priority for the company’s current management to sell functioning units quickly before the toxicity of the FTX brand spreads further and they lose value by association.

"Based on their preliminary review, the Debtors own or control a number of subsidiaries and assets that are regulated, licensed and/or largely not integrated into the Debtors’ operations, within and outside of the United States," the filing said, quoted by CoinDesk. "The Debtors believe a number of these entities have solvent balance sheets, independent management and valuable franchises."

The said entities include crypto derivatives exchange and clearinghouse LedgerX (also operated as FTX US Derivatives), stock trading platform Embed, FTX Japan, and FTX Europe.

Read also: FTX collapse hit crypto market less than previous crises: Chainalysis

"The Debtors and/or the Businesses have been in active conversations with a number of regulators for the Businesses," the filing read. "The licenses held by FTX Europe have been suspended along with its operations, and FTX Japan is subject to business suspension and business improvement orders. The longer operations are suspended, the greater the risk to the value of the assets and the risk of a permanent revocation of licenses."

According to the filing, FTX has already received “dozens of unsolicited” bids for its functioning units. The preliminary bid dates for different entities range from mid-January to early February, while final bid dates are stretched from mid-February to mid-March. The auctions will take place from late February through late March.

The aspiring purchasers would also need to verify their ability to secure regulatory approval for the deal.