Embed

FTX subsidiaries on auction block including LedgerX attract 117 interested buyers

Four businesses up for sale as part of bankruptcy proceedings include Embed, LedgerX, FTX Japan and FTX Europe.

As many as 117 parties have expressed interest in buying up one or more of FTX’s independently operated subsidiaries including FTX Japan, FTX Europe, LedgerX and Embed.

In a Jan. 8 court filing made by Kevin Cofsky, a partner at Perella Weinberg, the investment bank representing FTX US and affiliated firms. Cofsky stated:

“Approximately 117 parties, including various financial and strategic counterparties globally, have expressed interest to the Debtors in a potential purchase of one or more of the Businesses.”

He added that the debtors have entered into 59 confidentiality agreements with potential counterparties who have expressed interest in any one or more of the companies.

While no firm agreements have been made, they can access information to facilitate due diligence, such as details regarding the business unit’s operations, finances, and technology.

Four businesses up for sale include Embed, LedgerX, FTX Japan, and FTX Europe, according to lawyers representing FTX debtors.

Around 50 parties were interested in Embed, 56 were looking at LedgerX, 41 expressed interest in FTX Japan, and 40 were for FTX Europe, according to the filing.

Embed is a clearing firm that FTX acquired in June 2022 to enhance its stock and equities offerings. LedgerX is Commodity Futures Trading Commission (CFTC) regulated digital currency futures and options exchange and clearinghouse acquired by FTX in August 2021.

FTX Japan and FTX Europe are independent subsidiaries of FTX global but were subject to license and business suspensions in December.

In December, FTX sought permission from a U.S. bankruptcy court to sell off the firm’s Japanese and European branches, in addition to the two clearing companies.

The deadline for submitting initial bids for the four firms is set to expire between Jan. 18 and Feb. 1.

FTX units on auction block draw 117 interested buyers: Court filing

Four businesses up for sale as part of bankruptcy proceedings include Embed, LedgerX, FTX Japan and FTX Europe.

As many as 117 parties have expressed interest in buying up one or more of FTX’s independently operated subsidiaries including FTX Japan, FTX Europe, LedgerX and Embed, according to a court filing.

The court filing was made on Jan. 8 by Kevin Cofsky, a partner at Perella Weinberg, the investment bank representing FTX US and affiliated firms. Cofsky stated:

“Approximately 117 parties, including various financial and strategic counterparties globally, have expressed interest to the Debtors in a potential purchase of one or more of the Businesses.”

He added that the debtors have entered into 59 confidentiality agreements with potential counterparties who have expressed interest in any one or more of the companies.

While no firm agreements have been made, those parties can now access information to facilitate due diligence, such as details regarding the business unit’s operations, finances and technology.

The businesses up for sale are Embed, LedgerX, FTX Japanand FTX Europe, according to lawyers representing FTX debtors.

Around 50 parties were interested in Embed, 56 were looking at LedgerX, 41 expressed interest in FTX Japan and 40 were for FTX Europe, according to the filing.

Embed is a clearing firm that FTX acquired in June to enhance its stock and equities offerings. LedgerX is Commodity Futures Trading Commission-regulated digital currency futures and options exchange and clearinghouse acquired by FTX in August 2021.

FTX Japan and FTX Europe are independent subsidiaries of FTX global but were subject to license and business suspensions in December.

In December, FTX sought permission from a U.S. bankruptcy court to sell off the firm’s Japanese and European branches, in addition to the two clearing companies.

The deadline for submitting initial bids for the four firms is set to expire between Jan. 18 and Feb. 1.

FTX wants permission to sell FTX Japan and FTX Europe as well as LedgerX

The four businesses FTX wants to sell had only recently been acquired, and lawyers argue this simplifies the sale process.

Lawyers representing FTX are seeking permission from a U.S. bankruptcy court to sell off the firm’s Japanese and European branches, derivatives exchange LedgerX and stock-clearing platform Embed.

The lawyers note in their Dec. 15 filing that each of these businesses has been under pressure from regulators, which “merit[s] an expeditious sale process,” adding:

“The longer operations are suspended, the greater the risk to the value of the assets and the risk of a permanent revocation of licenses.”

FTX Japan is currently subject to business suspension and improvement orders, while FTX Europe has had its licenses and operations suspended.

They also point to the loss of customers and employees the businesses have experienced since FTX filed for bankruptcy on Nov. 11, and believe selling these businesses now would allow the resumption of operations and therefore maximize value to the FTX estate.

The lawyers said these businesses were recently acquired and have been operating relatively independently of FTX, which would make a potential sale process much less complex.

Assuming there is more than one potential bidder, the auctions for the businesses would start with Embed on Feb. 21, with the other three occurring the following month.

Proposed auction dates for the four businesses. Source: CourtListener

More than 110 parties are said to be interested in purchasing one or more of the 134 companies included in the bankruptcy proceedings, and FTX has already entered into 26 confidentiality agreements with counterparties interested in the businesses or assets of FTX.

LedgerX in particular has been hailed as a success story during the bankruptcy proceedings of FTX, with Commodity Futures Trading Commission Chairman Rostin Behnam noting that the firm had essentially been “walled off” from other companies within FTX Group, and “held more cash than all the other FTX debtor entities combined.”

FTX wants to sell off parts of its failed crypto empire before they lose too much value or have their licenses permanently revoked, arguing that the sales would be in the best interests of all stakeholders.