Bankrupt Crypto Exchange FTX Begins Strategic Review of Global Assets

as part of most recent bankruptcy filing, defunct cryptocurrency exchange FTX and 101 of its 130 affiliates announced the launch of a strategic review of its global assets. The review is to maximize the recoverable value for stakeholders.

FTX, at the time by CEOSam Bankman-Fried (SBF), filed for Chapter 11 bankruptcy protection on Nov. 11 after it was found to have misappropriated user funds. The bankruptcy filing is intended to mitigate the losses of stakeholders related to FTX and affiliated companies (ie, FTX debtors).

FTX debtors are in talks with financial services firm Perella Weinberg Partners about various sales or restructuring attempts. However, FTX caution “Employment of PWP is subject to court approval.”

An official filing with the U.S. Bankruptcy Court.Source: Kroll

SBF’s successor, CEO John J. Ray III, confirmed that the FTX affiliate has a solvent balance sheet that could be sold or restructured to reduce losses. Highlighting that some subsidiaries, such as cryptocurrency exchange LedgerX, were exempted as debtors in the bankruptcy filing, he added:

“Either way, our priority in the coming weeks will be to explore sales, recapitalization or other strategic transactions for these subsidiaries and others we identify as work continues.”

In addition, the FTX debtors concurrently filed a motion seeking interim relief from the bankruptcy court, which is scheduled to begin on November 22, 2022. While no deadline has been set for a sale or restructuring, Ray asked all stakeholders to “be patient”.

related: US Subcommittee Chair Urges Information From FTX Leadership

On November 19, the law firm that assisted FTX and SBF during the bankruptcy dropped from representing the entrepreneur, citing conflicts of interest.

According to Paul, Weiss attorney Martin Flumenbaum said:

“A few days ago, following FTX’s bankruptcy filing, we notified Mr. Bankman-Fried that a conflict had arisen that prevented us from representing him.”

Flumenbaum believes that Sam Bankman-Fried’s “continuous and disruptive tweets” have had a negative impact on the attorney’s restructuring efforts.