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FTX begins strategic review, seeks court relief to pay critical vendors

REUTERS/Marco Bello
The Cypriot regulator suspended the licence of FTX EU on November 11

Collapsed crypto exchange FTX said on Saturday it has launched a strategic review of its global assets and is preparing for the sale or reorganisation of some businesses.

FTX, along with about 101 affiliated firms, also sought court relief to allow the operation of a new global cash management system and payment to its critical vendors.

The exchange and its affiliates filed for bankruptcy in Delaware on November 11 in one of the highest-profile crypto blowups, leaving an estimated one million customers and other investors facing total losses in the billions of dollars.

FTX will explore sales, recapitalisations or other strategic transactions for some of its units, the company’s new Chief Executive officer John Ray said in a statement.

In a court filing on Saturday FTX asked for permission to pay pre-petition claims of up to $9.3 million to its critical vendors after an interim order and up to $17.5 million after the entry of the final order.

The exchange said that if it fails to receive the requested court relief, it will result in “immediate and irreparable harm” to its businesses.

“Based on our review over the past week, we are pleased to learn that many regulated or licensed subsidiaries of FTX, within and outside of the United States, have solvent balance sheets, responsible management and valuable franchises,” FTX’s Ray said.

FTX has identified 216 debtor bank accounts with positive balances as of November 16, but has only been able to verify the balances in 144 accounts so far, the company said in a separate court filing.

The company has appointed Perella Weinberg Partners LP as its lead investment bank to help with the sale process, subject to court approval.