Troubled cryptocurrency company FTX wants to sell its working units, such as LedgerX.
Last month, FTX filed for bankruptcy and said it owed more than $10 billion.
On Thursday, crypto exchange FTX asked a federal court for permission to sell some of its subsidiaries, including LedgerX, which deals with derivatives in the United States.
In a document filed with the Bankruptcy Court of Delaware, lawyers for FTX said that it was important for the company’s current management to “explore” the sale of certain subsidiaries or find other strategic transactions.
“Based on their preliminary review, the Debtors own or control a number of subsidiaries and assets that are regulated, licensed, or mostly not integrated into the Debtors’ operations, both inside and outside the United States,” the filing said. “The Debtors think that a number of these entities have sound balance sheets, independent management, and valuable franchises.”
These units include LedgerX, which did business as FTX US Derivatives, FTX Japan, FTX Europe, and Embed Business.
Most of these businesses were recently bought by FTX, which means they mostly ran on their own without much help from their global parent.
So, unlike some of FTX’s other subsidiaries, their assets and funds are kept separate from the company.
John Ray III, the new CEO of FTX, told Congress that even companies that seemed to be separate from FTX, like FTX US, were not really independent.
Last month, FTX filed for bankruptcy, saying that it had more than $10 billion in debts.
The filing said that FTX is looking for “dozens” of bids to sell these units quickly. Since FTX filed for bankruptcy, many have had their operating licenses taken away.
The filing said that “the debtors and/or the businesses have been in active talks with a number of regulators for the businesses.” “FTX Europe’s licenses and operations have been stopped, and FTX Japan is being told to stop doing business and make improvements. “The longer operations are stopped, the more likely it is that the value of the assets will go down and that licenses will be taken away permanently.”
The filing said that FTX had already gotten “dozens of unsolicited” bids for the companies, which is more than 100. If the sales are approved, people who are interested could put in bids for the different units, according to the filing, which said that bid dates for the different entities could be between February and March. Preliminary bid dates range from the middle of January to the beginning of February.
By these dates, people who wanted to buy the businesses at auction would have to show that they were both interested and able to do so.
Bidders will also have to show that they can get regulatory approval for the sales.
If a potential bidder gets past these problems, FTX would ask the bankruptcy court for hearings in March.
The filing said that FTX’s creditors would benefit from allowing these sales to go through.
“A sound business purpose exists for the sale of a debtor’s assets outside the ordinary course of business when such a sale is needed to maximize and preserve the value of the estate for the benefit of creditors and interest holders,” the filing said.