In a court filing, FTX announced its intention to sell off its subsidiary company, Digital Custody Inc, for approximately one twentieth of its initial purchase price across two transactions in 2021 and 2022.
The FTX estate is selling off assets to boost liquidity, aiming to repay its million-plus creditors.
FTX Plans To Sell Digital Custody to CoinList
A court filing reveals that the FTX estate plans to sell its subsidiary, Digital Custody Inc (DCI), to the crypto exchange CoinList for $500,000. FTX initially acquired DCI from Terrence Culver for $10 million, marking a twentyfold difference in the sale price.
“As set forth in Section 1.1 of the Agreement, the aggregate purchase price for the Interests consists of (i) $500,000 in cash, plus (ii) the Acquired Cash Amount set forth in Section 1.4 of the Agreement.”
The restructuring advisor of FTX, Alvarez & Marshal, believes that the price is fair for this point in time in the market. FTX creditor and online commentator known as Sunil, took to X (formerly Twitter) to point it out:
“A&M (UCC/Ad hoc agrees) says this reflects a fair price for the valuable license from South Dakota that allows it to provide custody.”
FTX remains engaged in restructuring efforts and advancing bankruptcy proceedings. Meanwhile, speculation suggests creditors will soon vote on the proposed plan.
However, crypto holders are concerned that the proposed plan entails liquidating a substantial amount of crypto assets, which could potentially affect the assets’ prices.
Concerns Over CoinList Financial Health in Recent Times
Around the same time that FTX went down under in November 2022, there was also speculation about the financial health of CoinList.
In November 2022, BeInCrypto reported that CoinList rejected all rumors of the exchange being illiquid or insolvent, stating that the rumors were ‘FUD.’
CoinList clarified that the issues it faced were technical ones that affected deposits and withdrawals.
However, CoinList was the receiving end of $35 million when Three Arrows Capital went bankrupt.
There were some legitimate reasons for them to be concerned, as CoinList was mass deleting KYC accounts earlier in 2021. Other users saw that their accounts were also deleted, losing all access to their funds.