FTX Announces Dissolution Plan After Bankruptcy: Creditors to Receive Full Repayment

FTX Announces Dissolution Plan After Bankruptcy: Creditors to Receive Full Repayment

It has been confirmed by lawyers representing FTX that the possibility of restarting the defunct exchange has been officially scrapped. Instead, the company will dissolve completely once all debts have been paid off. The lawyers are confident that full repayment to creditors is an attainable objective, albeit in the form of the dollar value of their crypto holdings. While this may disappoint some investors who have seen the value of their assets increase since the exchange went bankrupt, it is this very development that allows for the possibility of full refunds. Furthermore, the dissolution plan is legally sound and aligns with bankruptcy laws.

The decision to dissolve FTX marks the end of an era for the once-prominent exchange. While it may not be the outcome many investors had hoped for, it is a practical solution that ensures the repayment of creditors. The lawyers representing FTX are diligently working towards tallying up the necessary funds for full repayment to creditors. Although there are no guarantees yet, their objective is within reach.

In an effort to generate more funds for creditor repayment, FTX has sealed a deal to sell its subsidiary, Digital Custody Inc., to CoinList. Digital Custody Inc. is a Delaware-based firm with a South Dakota license that allows for the custody of digital assets. CoinList’s CEO, Terrence Culver, will provide the funds for the acquisition. However, an interesting twist arises in this deal. Terrence Culver is the same individual who originally sold Digital Custody to FTX for $10 million. The sale was conducted in two separate transactions, both taking place in 2021 and 2022. At the time, FTX US acquired the company to facilitate the custody of its own and client assets within the United States. However, with FTX winding down its operations, custody of assets is no longer a concern. The sale of Digital Custody Inc. to CoinList is deemed the most efficient and cost-effective way to maximize value for the benefit of the estates.

The committees representing non-US creditors of FTX have given their approval for the sale of Digital Custody Inc. to CoinList. This decision allows FTX to continue exploring potential deals until shortly before the sale date. In the event that the buyer withdraws from the deal, a reverse termination fee of $50k will be collected. The approval from the non-US creditors committees further solidifies the dissolution plan of FTX, bringing the exchange closer to its final phase.

As FTX approaches the conclusion of its bankruptcy proceedings, the focus remains on repaying creditors and winding down the business efficiently. The decision to dissolve rather than restart the exchange is a pragmatic one, considering the increased value of crypto assets since the bankruptcy. While investors may not receive their assets directly, the repayment in dollar value will ensure that they recoup their investment. The entire process aligns with bankruptcy laws, providing a legal framework for FTX’s dissolution.

FTX’s dissolution plan marks the end of a chapter in the exchange’s history. It is a bittersweet moment for investors, as they will receive repayment in the form of the dollar value of their assets rather than the direct assets themselves. However, this pragmatic solution allows for the possibility of full refunds and is legally sound. The sale of Digital Custody Inc. to CoinList further strengthens the funds available for creditor repayment. With approval from the non-US creditors committees, FTX can continue pursuing potential deals until the sale date. As the bankruptcy proceedings near their end, FTX is committed to paying off its debts and bringing closure to its operations.

Crypto

Articles You May Like

The Controversy Surrounding Bitcoin Layer 2 Solutions
The Escape and Extradition of Binance Executive Nadeem Anjarwalla
The Debate Over the Lummis-Gillibrand Payment Stablecoin Act
The Future of Gaming: NFT Integration in Playstation and Xbox Consoles

Leave a Reply

Your email address will not be published. Required fields are marked *