FTX Launches Strategic Review of Assets, Some Entities Have Solvent Assets

FTX Trading and the over 100 affiliated entities posted a release yesterday updating on the bankruptcy process.

FTX filed for bankruptcy on November 11th following a run on the bank where the company was unable to fulfill redemption requests. It has been widely reported that FTX provided loans to affiliated firm Alameda Research using customer money. Alameda apparently utilized FTT, the FTX native token as collateral. In the past month, FTT has gone from over $25 to just over on dollar, representing a profound loss of value.

FTX has said that as part of a strategic review of global assets, aiming to better understand what is recoverable, the FTX Debtors have engaged Perella Weinberg Partners LP as the lead investment bank, subject to Court approval.

Newly appointed FTX CEO John J. Ray, III, said that based on the review they have learned that many regulated or licensed entities within and outside the United States have “solvent balance sheets, responsible management and valuable franchises.”

“Some of these subsidiaries, such as LedgerX LLC and Embed Clearing LLC, for example,  are not debtors in the chapter 11 cases,” said Ray. “Other subsidiaries – such as FTX Japan KK, Quoine Pte. Ltd, FTX Turkey Teknoloji Ve Ticaret A.Ş., FTX EU Ltd, FTX Exchange FZE and Zubr Exchange Ltd – are debtors. Either way, it will be a priority of ours in the coming weeks to explore sales, recapitalizations or other strategic transactions with respect to these subsidiaries, and others that we identify as our work continues.”

Ray has instructed leaders at FTX Debtors to prioritize the preservation of franchise value as best they can.

“I respectfully ask all of our employees, vendors, customers, regulators and government stakeholders to be patient with us as we put in place the arrangements that corporate governance failures at FTX prevented us from putting in place prior to filing our chapter 11 cases.”

The company said that the FTX Debtors have filed various motions with the Bankruptcy Court seeking interim relief from the Court that, to allow the operation of a new global cash management system and the ordinary course payment of critical vendors and vendors at foreign subsidiaries.

A hearing has been scheduled for this Tuesday, November 22, 2022.


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