FTX Strategic Pivot: Digital Custody Division Set For $500K Sale In Bankruptcy Maneuver

FTX’s owed money and assets, managed by CEO John Ray III, are looking to sell Digital Custody to CoinList at a much lower price of $500,000. Terence Culver, the original CEO and seller of Digital Custody, provides the funding for this deal. FTX had bought Digital Custody for $10 million in the beginning.

As per FTX’s official documents, they got DC on board to handle custodial services for FTX US and LedgerX. However, DC was only fully blended into FTX’s world after the ex-CEO, Sam Bankman-Fried, went bankrupt in Nov 2022, just three months after snatching up DC. FTX made two separate $5 million deals for the company in Dec 2021 and Aug 2022.

FTX’s legal team clarified that Digital Custody no longer matters for the estate. They said, “DCI isn’t helping the Debtors’ business now, especially after selling LedgerX and with no plans to restart or sell FTX US.”

Yet, DC still has permission from the South Dakota Division of Banking to oversee things. After checking out three offers, including one from Culver, the debtors went for the better deal. It promised a speedy sale and a good connection with Culver, which is thought to help get regulatory approval fast.

FTX: Cryptocurrency Exchange Innovations

Moreover, FTX’s legal team said that both the committee and the ad hoc committee of non-U.S. customers gave the thumbs up to the deal. Still, FTX can look for a better offer for DC until three days before closing. If the buyer bails, they have to cough up $50,000.

FTX, the crypto exchange that’s gone kaput, wants to clarify that they’re not hitting the restart button. Nope, their focus is on paying back customers in full. At a Jan. 31 court hearing, FTX lawyer Andy Dietderich hammered home that point—no plans to relaunch, folks.

Before all this, many FTX users begged a U.S. bankruptcy judge to stop the fallen crypto exchange from valuing their crypto deposits using 2022 prices. They argued this approach left them out of the recent crypto price boom.

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