Bankrupt Exchange FTX Launches Strategic Reserve Review

Cryptocurrency exchange FTX has announced that it has begun reviewing its global assets and is preparing to sell or reorganize a number of subsidiaries.

FTX, along with 101 of its 130 affiliates, has taken legal action to allow a new global cash management system to operate and payments to its critical suppliers. The exchange and its branches filed
statement filing for bankruptcy in US Delaware on November 11. The reason was one of the most high-profile defaults in the history of the crypto industry, due to which about 1 million investors faced losses of billions of dollars.

The new CEO of FTX, John Ray III (J. Ray III), said that the exchange will consider selling its divisions. Highlighting that some subsidiaries, such as the LedgerX cryptocurrency exchange, are free from debtor claims at the time of filing for bankruptcy:

“In the coming weeks, our priority will be to look into sales, recapitalizations and other strategically important transactions in relation to these and other subsidiaries, which we determine as our team continues to work.”

FTX has asked the court for permission to pay $9.3 million to its critical suppliers before the court’s decision and up to $17.5 million after the final decision comes into effect. The exchange warned that if it did not get a court order, it would result in “immediate and irreparable damage” to its business.

FTX’s debtors have simultaneously filed motions for interim measures in the Bankruptcy Court, with a hearing scheduled for Nov. 22. While no deadline has been set for the sale or restructuring, Ray asked all stakeholders to be patient.

Law firm Paul Weiss recently announced that it was ending legal support for former FTX CEO Sam Bankman-Fried, citing a conflict of interest.