The crippled cryptocurrency exchange is going to sell Digital Custody for $500,000
FTX CEO John Ray III and the FTX debtors estate have filed to sell Digital Custody (DC) to CoinList for a substantial discount of $500,000, with financing delivered by DC’s original seller and CEO, Terence Culver. The failed cryptocurrency exchange FTX originally bought Digital Custody for $10 million.
FTX’s legal team states that DC was purchased to deliver custodial services for FTX US and LedgerX. However, DC was not totally incorporated into the FTX system before former CEO Sam Bankman-Fried filed for bankruptcy three months after acquiring them in November 2022. FTX purchased DC in two separate $5 million transactions made in December 2021 and August 2022.
FTX attorneys also clarified that since FTX US hasn’t resumed operations, DC holds little value for the estate. “DCI is no longer useful to the Debtors’ business, given the Debtors’ sale of LedgerX and that it is unlikely for the Debtors to sell or restart FTX US,” states the filing.
However, DC still maintains its custodial license from the South Dakota Division of Banking. After considering three bids, including one from Culver, the debtors chose the better deal and have a chance to close the sale quickly and gain a valuable relationship with Culver, which is believed to encourage quick regulatory approval.
FTX explained that its restructuring objectives don’t include relaunching the firm but concentrate on fully compensating customers. In a January 31 court hearing, FTX attorney Andy Dietderich underlined that despite expansive efforts, there is no intent to restart FTX.
Multiple FTX users previously requested that a US bankruptcy judge stop the defunct crypto exchange from evaluating their cryptocurrency deposits based on 2022 prices, which they claim prevented them from profiting from the recent crypto price surge.
