FTX to Sell Digital Custody Inc. to CoinList: What You Need to Know

The FTX Debtors' estate, led by CEO John Ray III, has begun the process of selling Digital Custody to CoinList.

CoinList is acquiring FTX’s digital custody subsidiary at a discounted price.

Image Image source: Ruholamin Haqshanas Last updated: February 11, 2024 04:42 EST | 2 min read

The FTX Debtors estate, led by CEO John Ray III, has taken the initiative to sell Digital Custody Inc. (DCI) to CoinList. Previously acquired by FTX in two separate transactions amounting to $10 million, DCI will now be acquired by CoinList for a significantly reduced price of $500,000. Let’s dive into the details and understand the implications of this sale.

A Tale of Failed Integration

According to FTX’s lawyers, DCI was initially acquired to offer custodial services for FTX.US and LedgerX. However, due to former CEO Sam Bankman-Fried’s bankruptcy filing in November 2022, the integration of DCI into the FTX ecosystem never materialized. This unfortunate turn of events rendered the subsidiary essentially worthless to the FTX estate.

🎭 Imagine DCI as a talented violinist, eager to join a world-renowned orchestra. But before the audition, the conductor goes bankrupt and the orchestra falls into disarray, leaving the violinist without a platform to showcase their skills. Poor DCI, left with its custodial services license but stranded without a stage to perform on.

CoinList: The Savior of DCI?

After receiving offers from three interested parties, including Terence J. Culver, the original CEO and seller of Digital Custody, the Debtors selected CoinList as the preferred purchaser. CoinList stood out with their superior offer, ability to swiftly complete the transaction, and an existing relationship with Culver.

🤝 CoinList, like a knight in shining armor, rode into the scene with a bag of gold, ready to rescue the forsaken DCI. Their association with Culver is expected to expedite regulatory approval for the sale, adding an extra layer of advantage.

FTX’s Ace in the Hole

While the transaction is set to proceed with CoinList, FTX retains the right to consider more favorable offers for DCI up until three days before the closing of the deal. It’s a clever move by FTX, ensuring they have space to explore alternative options and potentially maximize their return on the subsidiary.

⚖️ FTX, like a seasoned poker player, carefully holds onto its trump card, playing the field of potential buyers. Will they pull off an ace on the river and secure a better deal? Only time will tell.

Q&A: What More Do You Want to Know?

Q: How will CoinList’s association with Culver benefit the regulatory approval process?
A: CoinList’s existing relationship with Culver could establish a level of credibility and trust, potentially reducing the time required for regulatory authorities to approve the sale.

Q: Can FTX consider better offers for DCI after the deal with CoinList is almost finalized?
A: Yes, FTX has retained the right to evaluate more favorable offers until three days before the closing of the deal. They are keeping their options open.

Looking Ahead: FTX’s Strategic Moves

While the sale of DCI progresses, FTX is also making strategic moves in other areas. They recently sought approval to sell their 8% stake in AI startup Anthropic Holdings. With a valuation of up to $18 billion, FTX’s stake in Anthropic could potentially be worth approximately $1.4 billion. These strategic maneuvers hint at FTX’s intentions to repay all customer and creditor claims, adding a glimmer of hope for those affected by the FTX collapse.

🔮 The crystal ball reveals FTX as an agile player in the financial landscape, making strategic moves to protect their interests and ensure a brighter future for their stakeholders.

In Conclusion

FTX’s decision to sell Digital Custody Inc. (DCI) to CoinList for a reduced price opens up new possibilities for both parties. While FTX may still explore better offers, CoinList’s association with Terence J. Culver brings potential advantages for expediting regulatory approval. FTX’s strategic moves, including the sale of their stake in Anthropic Holdings, indicate their commitment to resolving the aftermath of the FTX collapse. As the situation unfolds, one thing is certain – the financial landscape is ever-evolving, and FTX is making its moves strategically.

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