Bankrupt cryptocurrency exchange FTX is exploring sales, recapitalizations, and other strategic transactions with respect to its solvent subsidiaries. The firm’s new CEO has instructed the FTX team “to prioritize the preservation of franchise value as best we can in these difficult circumstances.”
New FTX CEO Outlines Priorities
Cryptocurrency exchange FTX and approximately 101 affiliated companies announced Saturday that they are “launching a strategic review of their global assets to begin to maximize recoverable value for stakeholders.” The review is part of their Chapter 11 bankruptcy process.
The new FTX CEO, John J. Ray, III, who replaced Sam Bankman-Fried after the crypto exchange filed for bankruptcy on Nov. 11, explained:
Based on our review over the past week, we are pleased to learn that many regulated or licensed subsidiaries of FTX, within and outside of the United States, have solvent balance sheets, responsible management, and valuable franchises.
He explained that some financially attractive subsidiaries, such as Ledgerx and Embed Clearing, are not debtors in the chapter 11 cases while others are, including FTX Japan, Quoine, FTX Turkey, FTX EU, FTX Exchange FZE, and Zubr Exchange.
Ray revealed:
It will be a priority of ours in the coming weeks to explore sales, recapitalizations, or other strategic transactions with respect to these subsidiaries, and others that we identify as our work continues.
The executive added that he has instructed the team at FTX “to prioritize the preservation of franchise value as best we can in these difficult circumstances.”
In addition, FTX filed various motions with the bankruptcy court Saturday “seeking interim relief from the court that, if granted, would allow the operation of a new global cash management system and the ordinary course payment of critical vendors and vendors at foreign subsidiaries.”
One of the court filings shows that the crypto company asked for permission to pay critical vendors that are essential in keeping its operations functioning while it attempts to reorganize. The exchange said that without the requested court relief, its businesses will suffer “immediate and irreparable harm.” A hearing has been scheduled for Tuesday, Nov. 22.
Ray said last week after going through FTX records: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”
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