Leading cryptocurrency exchange FTX, led by CEO John Ray III, has made the important decision to sell one of its subsidiaries, Digital Custody Inc (DCI), to CoinList, a platform known for token sales and trading, in order to ease its financial burdens and repay debts. The sale, which is currently awaiting court approval, comes at a notable discount, with FTX agreeing to part ways with DCI for just $500,000, representing a staggering 95 percent reduction from the original $10 million acquisition cost. Here are the details…
FTX sold its cryptocurrency company
FTX initially acquired DCI, a trust company registered in South Dakota. The purpose of the acquisition was to strengthen its services by providing custody solutions for crypto assets. In the acquisition, which was completed in two separate transactions, FTX paid $ 5 million on December 21, 2021. Then, on August 6, 2022, he invested another $5 million. However, despite these initial goals, FTX’s plans for DCI were never fully realized, primarily due to unforeseen challenges in the cryptocurrency landscape, including regulatory pressures and internal restructuring issues.
The decision to divest DCI follows a recent statement from FTX. Specifically, it comes as he announced that he was abandoning plans to relaunch FTX as FTX.com. FTX shared its intention to rejuvenate its operations under a new brand. But it has faced difficulties in securing the necessary investment to support the relaunch. So he ultimately decided to stop the project. As a result, DCI was deemed redundant in FTX’s asset portfolio, with no immediate plan to revitalize its US-based operations, including FTX.US.
Judiciary will review DCI sale
CoinList’s acquisition of DCI, though subject to judicial review, was facilitated by DCI’s original CEO and dealer, Terence J. Culver. Culver, who played a key role in founding DCI, agreed to lend $500,000 to facilitate the transaction. Thus, he further consolidated his participation in the agreement. In addition to financial support, Culver will benefit from the transaction by acquiring a 10% stake in CoinList. Thus, it will underline its commitment to the cryptocurrency ecosystem.
The sale of LedgerX and FTX, FTX’s legal representatives said in court filings. He emphasized that DCI has a minimum value for FTX after efforts to revive US were stopped. Although FTX investigated potential buyers for DCI, it concluded that a sale to CoinList represented the most appropriate option to maximize the value of the asset. The proposed sale has received support from key stakeholders, including the Committee of Unsecured Creditors and the Interim Committee on FTX.com’s Non-U.S. Customers. It also showed a consensus among the parties involved in FTX’s bankruptcy proceedings.
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