FTX, the most recently collapsed crypto exchange, announced on Saturday, Nov. 19, the start of a strategic review of its global assets in preparation for the possible sale or reorganization of some businesses.
To facilitate the launch of a new worldwide cash management system and the payment of its important vendors, FTX and around 101 related entities filed for declaratory relief.
Requested Court Relief
On Nov. 11, in one of the most publicized crypto blowups, the exchange and its affiliates filed for bankruptcy in the State of Delaware, leaving behind an estimated one million clients and other investors with total losses in the billions of dollars.
This Saturday, CNBC reported that FTX filed a motion asking the court to allow it to pay its important suppliers up to $9.3 million in prepetition claims after an interim order of up to $17.5 million.
According to the exchange, its companies would suffer "immediate and irreparable" loss if they cannot get the judicial remedy they have asked for.
Company Evaluation
John Ray, FTX's new CEO, expressed his satisfaction with the company's regulated and licensed subsidiaries after a week of review.
"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," he stated, per CNBC's report.
Subject to the court's consent, the business has selected Perella Weinberg Partners LP as its principal investment bank to facilitate the transaction.
As a result of corporate governance failings at FTX, Ray is urging all of their workers, suppliers, customers, regulators, and government stakeholders to be patient while they put in place the provisions.
Early Warning Signs
The rapid demise of FTX is discussed at length by NBC News.
Based on the report, the cryptocurrency market started to flourish after former CEO Sam Bankman-Fried launched FTX shortly.
In 2021, the bitcoin value soared from its previous price of roughly $10,000 to almost $64,000. Since the influx of venture funding into the blockchain and cryptocurrency industries, crypto platforms have broadened their client base beyond the early adopter community of engineers and blockchain believers.
Since its peak in late 2021, the price of bitcoin, a benchmark for the cryptocurrency sector as a whole, has fallen substantially. The current price is close to $16,000. Values of other cryptocurrencies and tokens followed suit.
Many large platforms have already closed due to the overall crypto sector downturn, but FTX looked untouchable as it even bought up some of its failing rivals, NBC reported.
However, things started to shift early this month when CoinDesk, a crypto-focused digital media website, disclosed the balance sheet of Alameda Research, a crypto investment business also controlled by Bankman-Fried.
The results proved that Alameda had a large amount of FTT, a digital currency developed by FTX.
Although the FTT had some value in the market, if its price were to plummet, Alameda would be in danger of going bankrupt.
Related Story: Sam Bankman-Fried Allegedly Transferred Digital Assets to the Bahamas, FTX Says After Bankruptcy
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Written by Trisha Kae Andrada
