Court filings from the FTX Debtors estate explain that DCI never became fully integrated into the FTX ecosystem before the bankruptcy proceedings. This, coupled with the uncertain future of FTX.US, has rendered DCI largely valueless to the estate, prompting the fire sale.
In a bid to alleviate its financial woes, bankrupt cryptocurrency exchange FTX has announced plans to offload its subsidiary Digital Custody Inc. (DCI) to CoinList for a mere $500,000. This move represents a significant markdown from the $10 million FTX shelled out for DCI in two installments back in 2021 and 2022.
Originally acquired with the intention of bolstering FTX’s custodial services for its US-based platforms, FTX.US and LedgerX, DCI’s integration plans were derailed by the bankruptcy filing of FTX’s former CEO Sam Bankman-Fried in November 2022, just months after the acquisition.
Valueless to the Estate
Court filings from the FTX Debtors estate reveal that DCI never managed to seamlessly integrate into the FTX ecosystem prior to the bankruptcy proceedings. This, coupled with the uncertain future of FTX.US, has led to DCI being deemed largely valueless to the estate, prompting the decision for a fire sale.
CoinList, a platform renowned for facilitating token sales and trading, has stepped in as the buyer. Financing for the purchase is said to be provided by DCI’s original CEO and seller, Terence Culver.
A Reprieve for Beleaguered FTX
While the sale of DCI will inject some much-needed funds into the FTX estate, uncertainties loom regarding its long-term implications. The full impact on creditors and stakeholders remains to be seen as the transaction progresses.
This move by FTX underscores the challenges facing the cryptocurrency exchange amid its bankruptcy proceedings and highlights the complexities involved in navigating the volatile crypto landscape.