According to Cointelegraph: The debtors' estate of FTX, led by CEO John Ray III, is planning to sell Digital Custody to CoinList for a considerable markdown of $500,000, according to a recent legal filing. The funds for the purchase are provided by DC's original CEO and seller, Terence Culver. The move comes in the aftermath of FTX's declaration of bankruptcy in November 2022.
Previously, FTX had acquired Digital Custody for a sum of $10 million, intending to offer custodial services for FTX US and LedgerX. However, the integration of Digital Custody into FTX was not completed before Sam Bankman-Fried, FTX's ex-CEO, filed for bankruptcy.
The company's legal team explained that because FTX US hasn't been rebooted, Digital Custody offers minimal value to the estate. "DCI is no longer useful to the Debtors’ business, given the Debtors’ sale of LedgerX and that it is unlikely for the Debtors to sell or restart FTX U.S..”
Despite these circumstances, Digital Custody retains a custodial license from the South Dakota Division of Banking. After evaluating three offers, the debtors decided on the one providing for speedy completion of the sale and fostered a relationship with Culver that's anticipated to expedite regulatory approval.
Both the committee and the ad hoc committee of non-US customers of FTX.com have approved the transaction. As per the agreement, FTX can seek a better offer for Digital Custody until three days ahead of closing. A reverse termination fee of $50,000 applies if the buyer fails to complete the deal.
FTX has indicated that restructuring plans won’t include a restart of operations. The focus remains on repaying customers in full. The selling of Digital Custody appears to be a step in this direction.