Ad Hoc Committee seeks full transparency over FTX’s plans to sell subsidiaries

A group of FTX customers wants to bring better clarity on whether the FTX bankruptcy leading team is using the FTX customer’s fund in the right way or not for the subsidiary companies. 

FTX was a popular Crypto exchange but Sam Bankman-Fried (SBF), co-founder and former CEO of FTX exchange, misused the user’s fund for personal benefits. On 8 Nov FTX failed to give fund withdrawal for all the users and finally on 11 Nov filed for bankruptcy in a US district court along with 100s of its affiliated companies, which faced significant financial loss & failed to provide services smoothly. 

On 5 Jan 2023, a group of 18 FTX customers “Ad Hoc Committee” filed an objection in the court to bring the whole back-end procedures of the FTX subsidiaries revival/sell plans, for example, sale & funding to subsidiary companies.

In short, these FTX customers want clarity on whether FTX bankruptcy proceeding is going very well with considering the benefits of the FTX creditors, or say former customers, who are waiting to get their money back. 

In the objection, FTX creditors group said:

“(there were) significant concerns over the lack of information regarding the sale of the businesses,” and also questioned whether the businesses may be “necessary to a potential restart (of the FTX).”

Ad Hoc Committee is the first I've seen mention a potential FTX restart to the court – one of the reasons they list for filing they limited objection to FTX's planned sales of solvent subunits. pic.twitter.com/7TCW3WwRm0

— FTX Creditor (@AFTXcreditor) January 5, 2023

Just a few weeks back, reports noted that FTX’s current leadership team asked for regulatory approval from the court to sell other existing FTX subsidiaries. Through the filing, FTX claimed that FTX’ remaining successful businesses may face some negative impact, as the parent company collapsed. 

So, FTX seeks to sell European and Japanese branches and also derivatives exchange LedgerX and stock-clearing platform Embed.

Earlier this week, the same committee filed a motion in the court to keep the details of the non-US customers private in the bankruptcy proceedings, to save the former FTX customers from any kind of identity theft.

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