Key takeaways:
- FTX is prepared to sell US derivatives exchange LedgerX for $50 million, a fraction of its original purchase price.
- Despite possessing contending securities exchanges, MIH opted to purchase LedgerX.
On Tuesday, the bankruptcy attorneys for FTX reached an agreement to sell LedgerX, the company’s derivatives trading platform, to M7 Holdings. The collapsed cryptocurrency exchange’s debtors are anticipated to get $50 million from the interest purchase arrangement.
According to a copy of FTX’s 2021 annual financial statements obtained by The Wall Street Journal, if the court tracking FTX’s bankruptcy authorises the sale, it would result in a loss of around $250 million for FTX on its investment in LedgerX, which the business bought for roughly $298 million in August 2021.
The US Bankruptcy Court’s permission is the final requirement, which is expected on May 4, 2023, to complete the multimillion-dollar company sale, according to the release. This is dependent on the CFTC’s lack of objections and the execution of specific legal obligations.
According to a different release from the buyer, the transaction will likely be handled by Miami International Holdings, Inc. (MIH). The Miami International Securities Exchange (MIAX) is owned by MIH. Interestingly, on April 21, MIAX and a number of other businesses were revealed as OPNX investors.
OPNX is the replacement for the defunct cryptocurrency businesses Three Arrows Capital and CoinFLEX.
“We are pleased to have reached this arrangement with MIH, which is a prime instance of our ongoing efforts to capitalise on assets to deliver recoveries to stakeholders,” stated John J. Ray III, FTX’s CEO and Chief Restructuring Officer.
It is significant to remember that FTX obtained permission to sell company units early this year in order to raise cash for creditors. Additionally, it is attempting to sell FTX Europe, FTX Japan, and Embed Financial Technologies. According to a legal file made at the beginning of this year, 117 parties have expressed interest in purchasing FTX firms.
LedgerX was one of the FTX divisions that held up financially throughout the exchange’s investigation into the previous CEO Sam Bankman-Fried‘s multimillion-dollar losses.
Over a dozen other firms expressed interest in purchasing the cryptocurrency derivatives exchange, according to a report from December 2022. They also noted that some of the parties involved had consented to sign non-disclosure agreements.
LedgerX has also attracted the interest of commodities trading platform Kalshi and cryptocurrency exchange Bitpanda, along with six other businesses in the industry.
The fulfillment of the transactions contemplated by the purchase agreement is contingent upon a number of factors, such as the issuance of a final sale order by the U.S. Bankruptcy Court for the District of Delaware, the satisfaction of all applicable legal requirements, and the lack of any CFTC disagreements to the transaction.
