FTX's Bargain Sale of Digital Custody Unit Amid Bankruptcy
In its bankruptcy proceedings, FTX is set to sell Digital Custody Inc. for $500,000, a stark contrast to its previous $10 million purchase price, to streamline costs and repay creditors.
February 12, 2024
FTX Asset Sale
FTX's bankrupt estate is in the process of selling its previously acquired unit, Digital Custody Inc. (DCI), at a significantly reduced price of $500,000 to CoinList. Acquired for $10 million in August 2022, DCI was intended to serve as a custodial service but never integrated into FTX.US or LedgerX due to FTX's collapse.
Licensing and Value
Despite minimal operations, DCI holds value with a custody license from South Dakota. The sale is seen as a means to reduce additional costs for the debtors. FTX has foregone an auction, opting to entertain higher bids before the sale hearing. CoinList, along with DCI's former CEO Terrence Culver, is poised to expedite the purchase, backed by financing through convertible notes.
FTX's Broader Repayment Plan
As FTX navigates bankruptcy, selling off subsidiaries is part of its strategy to repay creditors. An example includes efforts to sell its stake in AI startup Anthropic. The overall aim remains to satisfy creditor claims and streamline the estate's holdings.
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