- FTX can sell key units like LedgerX and Embed, a Delaware bankruptcy judge ruled.
- FTX filed for bankruptcy on November 11, 2022, following a report on Alameda Research's balance sheet.
- The goal of the sale is to generate more value for creditors by selling off solvent and easy-to-separate parts of the business.
A Delaware bankruptcy judge has ruled that FTX, a crypto exchange founded by Sam Bankman-Fried, can sell four of its key units, including its derivatives arm LedgerX and stock-clearing platform Embed. The investment bank Perella Weinberg will now be able to proceed with the sell-offs, which also include the exchange's European and Japanese units.
These units have already attracted as many as 117 expressions of interest from potential buyers. The sale notices will be published within around three business days and indications of interest will be received between January 18 for Embed and February 1 for FTX Europe and Japan.
FTX filed for bankruptcy on November 11, 2022, following a report by CoinDesk that scrutinized the integrity of the trading arm Alameda Research's balance sheet. As a result, the exchange was forced to seek protection from creditors and restructure its debts.
However, claims linked to former senior executives and their families will not be included in the sale due to concerns from the Department of Justice about sales where there have been serious allegations of wrongdoing. Sam Bankman-Fried, the founder of FTX, has pleaded not guilty to charges including wire fraud while serving as chief executive officer. His former lieutenants Caroline Ellison and Gary Wang are said to be cooperating with investigators.
The estate, now run by restructuring expert John Ray, hopes to generate more value for creditors by speedily selling off the more solvent and easy-to-separate arms of the business. The goal is to repay as much debt as possible and secure the best possible outcome for all parties involved. The judge, John Dorsey of the Delaware Bankruptcy Court, approved the measures in an order dated Thursday after a hearing held on Wednesday.