FTX debtors filed a motion to sell Digital Custody Inc. for a mere $500,000 — an amount that is $9.5 million lower than the bankrupt exchange originally paid.
According to a bankruptcy filing, DCI “has relatively few operations” but retains some value due to its South Dakota license allowing it to offer custody services.
The debtors plan to sell the entity to CoinList, with DCI board member Terence Culver providing the financing for the purchase.
FTX, under Sam Bankman-Fried, bought Digital Custody in August 2022 for $10 million. The exchange collapsed and filed for bankruptcy a few months later.
Read more: FTX debtors scrap reboot plans
Due to the bankruptcy, DCI “was never integrated into the operations of FTX US or LedgerX prior to the commencement of these Chapter 11 Cases.”
“DCI is also 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,” the filing said.
The FTX debtors also want to offload DCI to “avoid any further and additional operational, carrying or other expenses associated with the Interests.”
The debtors, as part of the agreement, can consider higher bids from other parties up to three days before the hearing on the motion, according to the filing.
FTX is in the middle of bankruptcy proceedings as it continues to wind down the estate and pay creditors back. The debtors filed to unload the former exchange’s stake in AI firm Anthropic last week. The stake could be worth as much as $1.4 billion.
The debtors announced that they plan to pay back creditors in full “eventually” and have scrapped plans to reboot the exchange.
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Source: https://blockworks.co/news/ftx-debtors-subsidiary-sale