FTX Launches Strategic Review, Seeks Court Relief to Pay Critical Vendors

Collapsed crypto exchange FTX said on Saturday it has launched a strategic review of its global assets and is preparing for the sale or reorganisation of some businesses.

FTX, along with about 101 affiliated firms, also sought court relief to allow the operation of a new global cash management system and payment to its critical vendors.

The exchange and its affiliates filed for bankruptcy in Delaware on November 11 in one of the highest-profile crypto blowups, leaving an estimated 1 million customers and other investors facing total losses in the billions of dollars.

FTX in a court filing on Saturday asked for permission to pay prepetition claims of up to $9.3 million (nearly Rs. 75 crore) to its critical vendors after an interim order and up to $17.5 million (nearly Rs. 140 crore) after the entry of the final order.

The exchange said that if it fails to receive the requested court relief, it 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 new Chief Executive Officer John Ray said.

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

“I respectfully ask all of our employees, vendors, customers, regulators and government stakeholders to be patient with us as we put in place the arrangements that corporate governance failures at FTX prevented us from putting in place prior to filing our chapter 11 cases,” Ray said.

© Thomson Reuters 2022


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