Over 100 Parties Want to Buy Parts of FTX

More than 100 interested parties are looking to purchase a portion of the failed cryptocurrency exchange FTX.

According For court documents reviewed by Business Insider, lawyers handling the FTX’s Chapter 11 bankruptcy case are planning to Auction Four of the companies were previously owned by disgraced former CEOs Sam Bankman Fried.

Bankman-Fried currently faces up to 115 years in prison if found guilty of all eight counts against him by federal prosecutors, including wire fraud, but it is unlikely he will face the maximum possible sentence even if he is found guilty, say legal experts.

The co-founder of FTX pleaded not guilty to using $8 billion of customers’ money to fund luxury purchases and political donations.

Federal prosecutors accused him “perpetuat[ing] a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds.”

According to the Department of Justice, the CEO had used customer funds. “his personal use to make investments and millions of dollars of political contributions to federal political candidates and committees and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency hedge fund also founded by the defendant.”

The Securities and Exchange Commission has now brought him additional charges.

Financial Firms Pick the Corpse Of FTX

However, bankruptcy filings starting December 2022 are not allowed (pdf) The four businesses are up for sale “maintained segregated customer accounts,” Bankman-Fried was still able to use his clients’ money for illegal purposes.

According to Business Insider, a Delaware bankruptcy court document filed on Jan. 8 stated that 117 people had expressed interest in purchasing at minimum one FTX-owned entity and that 59 confidentiality agreements had been agreed upon.

According to Business Insider’s report, none of the identities of any parties were revealed in the filing. However, they include “various financial and strategic counterparties globally.”

According to the document, at least 50 people were interested in purchasing LedgerX (an exchange platform that FTX purchased in October 2021). They are also considering Embed, an Embed that was acquired in the scheme to allow stock trading at FTX.

FTX Europe as well as FTX Japan are up for purchase with approximately 40 interested parties, according to the document.

Management presentations were made by the debtors to management. “preliminary diligence materials” Embed and LedgerX. They are creating them for FTX platforms. Their operations have been suspended.

According to the filing, Embed, LedgerX and FTX Europe had their own computer systems while FTX Europe was run from separate headquarters.

FTX’s current controllers said they had received “dozens of unsolicited inbound inquiries,” and that they are willing to maximize what is left of the cryptocurrency platform’s value in order to reimburse former clients, Business Insider reported.

DOJ Shows Concerns About Evidence Loss if Auction Proceeds

Although the auctions for FTX are set to begin on Feb. 27, the Department of Justice’s bankruptcy division, the United States Trustee, has objected to the procedure.

According to the government appointed trustee, there was “serious cause for concern” Concerning the possible loss of business records in the sale. This could prevent future investigations into any wrongdoing at the failing crypto firm.

“The sale of potentially valuable causes of action against the debtors’ directors, officers, and employees, or any other person or entity, should not be permitted until there has been a full and independent investigation into all persons and entities that may have been involved in any malfeasance, negligence, or other actionable conduct,” Andrew Vara, the trustee, stated this in a court filing.

He said that an independent investigation was requited before any sale, because valuable information related to the exchange’s bankruptcy could be compromised, reported Reuters.

On Jan. 11, a hearing will be held at Delaware’s bankruptcy court.

Bryan S. Jung is a New York City resident and native. He has a background both in politics and the legal sector. He graduated from Binghamton University.