FTX asset sales challenged by U.S. Trustee: Report

A U.S. Trustee filed an objection to plans by FTX to sell its units in Europe and Japan, among other businesses.

Bankrupt crypto exchange FTX’s plans to sell its digital currency futures and clearinghouse LedgerX, among other businesses, were challenged by the U.S. Trustee on Jan. 7, according to Reuters.

As per the filing, U.S. Trustee Andrew Vara called for an independent investigation before any sale, claiming that valuable information related to the exchange’s bankruptcy could be compromised. The document states:

“The sale of potentially valuable causes of action against the Debtors’ directors, officers and employees, or any other person or entity, should not be permitted until there has been a full and independent investigation into all persons and entities that may have been involved in any malfeasance, negligence or other actionable conduct.”

In an effort to recover lost funds from the exchange’s customers, FTX’s new management planned to sell its units in Japan and Europe, along with derivatives exchange LedgerX and stock-clearing platform Embed. In a filing from Dec. 15, lawyers representing FTX argued that selling these businesses would maximize value to the FTX state.

FTX’s lawyers also estimate that a potential sale of the units would be much simpler, since they were recently acquired and operated independently of FTX. The business’ auctions were planned to start in February with the sale with Embed, followed by other three auctions in March.

FTX Japan was subject to business suspension and improvement orders in November amid its parent company collapse. FTX Europe also had its licenses and operations suspended after a request from the Securities and Exchange Commission of Cyprus, Cointelegraph reported.

There are more than 110 parties interested in purchasing one or more of the 134 companies included in the bankruptcy proceedings. FTX has already entered into 26 confidentiality agreements with counterparties.

FTX founder and former CEO Sam Bankman-Fried pleaded not guilty to all criminal charges related to the collapse of the crypto exchange on Jan. 3, including wire fraud, securities fraud, and campaign finance violations.

Source: https://cointelegraph.com/news/ftx-asset-sales-challenged-by-u-s-trustee-report