Collapsed Crypto Exchange FTX Starts Strategic Review, Asks Relief From Court To Pay Crucial Debtors

FTX, the cryptocurrency exchange that recently collapsed has announced that it had started a strategic review of its global assets and was getting ready to sell or reorganize some companies.

A court order was also requested by FTX and about 101 affiliated companies to permit the operation of a new global cash management system and the payment of its essential vendors.

In one of the most publicized crypto meltdowns, the exchange and its affiliates filed for bankruptcy in Delaware on November 11. An estimated million customers and other investors are expected to have lost billions of dollars as a result.

According to a statement from the company’s new CEO John Ray, FTX will look into sales, recapitalizations, or other strategic transactions for some of its units.

In a court filing on Saturday, FTX asked for permission to pay prepetition claims to critical vendors of up to $9.3 million after an interim order and up to $17.5 million after the final order.

According to the exchange, failure to obtain the requested court relief will result in “immediate and irreparable harm” to its businesses.

“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,” FTX’s Ray said.

As of Nov. 16, FTX had identified 216 debtor bank accounts with positive balances, but had only been able to verify the balances in 144 of them, according to a separate court filing.

Subject to court approval, the company has appointed Perella Weinberg Partners LP as its lead investment bank to assist with the sale process.

FTX, which recently filed for bankruptcy protection in the United States, had previously fired three of its top executives, including co-founder Gary Wang, according to the Wall Street Journal, citing an FTX spokeswoman.

According to the newspaper, the other executives fired were engineering director Nishad Singh and Caroline Ellison, who ran FTX’s trading arm Alameda Research.

The cryptocurrency exchange filed for bankruptcy last week, and former Wall Street trader Sam Bankman-Fried resigned as CEO after rival exchange Binance backed out of a proposed acquisition.

Multiple FTX group companies are involved in the bankruptcy proceedings in the United States, with over 100,000, and possibly over one million, creditors.

According to interviews with several people close to Bankman-Fried and previously unreported company communications, the company was secretly taking risks with customer funds to prop up a trading firm owned by Bankman-Fried, which led to the company’s demise.

The dozens of licenses obtained through its numerous acquisitions had brought the company under regulatory scrutiny.

However, this did not protect its customers and investors, who are now facing billions of dollars in losses.

Several crypto firms have since braced for the fallout from the FTX collapse, with many counting their exposure to the beleaguered exchange in the millions.

(Adapted from


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