The subsidiaries are facing regulatory backlash after the collapse of the parent company.
More than 110 potential buyers are already lined up to buy these businesses.
The collapsed crypto exchange, FTX has filed a motion in the United States Bankruptcy Court seeking permission to sell four subsidiaries. FTX Japan, FTX Europe, derivatives exchange LedgerX, and stock-clearing platform Embed are the named businesses.
FTX Subsidiaries Facing Regulatory Scrutiny
Moreover, the lawyers of the bankrupt crypto exchange argued that all four businesses were acquired relatively recently, so their operations remained largely independent from the tainted global parent.
Earlier, Commodity Futures Trading Commission’s Chair, Rostin Behnam hailed LedgerX, which is operating as FTX US Derivatives, calling it a success story despite the collapse of the enormous empire. The subsidiary essentially “held more cash than all the other FTX debtor entities combined.”
Buyers Lined Up for FTX Subsidiaries
The court filing detailed that FTX had already received more than 110 ‘unsolicited’ bids for the four entities. Now, the company needs the court’s permission to officially accept the bids, which will possibly be scheduled between February and March.
If the sale is approved, Embed Business will be the first auction on 21 February 2023, followed by LedgerX on 7 March, and FTX Japan and FTX Europe on 21 March. Potential buyers must submit documents before the specified dates and prove their ability to bid and secure regulatory approvals.
“The Debtors and/or the Businesses have been in active conversations with a number of regulators for the Businesses,” the filing stated, adding: “A sound business purpose for the sale of a debtor’s assets outside the ordinary course of business exists where such sale is necessary to maximize and preserve the value of the estate for the benefit of creditors and interest holders.”
FTX’s Founder and former CEO, Sam Bankman-Fried, is now facing criminal charges in the United States for his alleged misdeeds. Along with the Department of Justice, two top government regulators filed fraud charges against him. He was arrested earlier this week by the Bahamas police and was denied bail because of being a flight risk.