FTX has recently reached an agreement on the sale of its European branch following a legal dispute between the exchange’s management and the eventual buyers. This development comes as the embattled crypto exchange continues to gather more liquidity in a bid to pay off its million creditors.
FTX Returns European Arm To Former Owners At ‘Much Discounted Price’
According to a Reuters report on Friday, FTX has successfully completed the re-sale of its European subsidiary to the previous owners at a price of $32.7 million. Initially, the exchange had filed a lawsuit against the founders of FTX Europe, then known as Digital Assets AG (DAAG), as it aimed to recover the $323 million paid in the acquisition deal in 2021.
FTX argued that the crypto startup founders, Patrick Gruhn, and Robin Matzke, had sold the company at an inflated price, describing the deal as a “massive overpayment” financed by customers’ deposits. In addition, the embattled crypto exchange stated that DAAG (now FTX Europe) was merely more than a business proposal with no running operations at the time of acquisition.
In response, Gruhn and Matzke have denied these claims and instead filed a counterclaim seeking to receive $256.6 million from the crypto exchange in damages. FTX has stated that defending these counterclaims would be a costly adventure and more so difficult as key figures involved in the acquisition deal, such as the exchange’s former CEO Sam Bankman-Fried, are currently unavailable for court testimony.
This development, combined with an inability to find competing buyers with an interest in the European subsidiary, forced FTX to eventually agree on a deal with the company’s founders at $32.7 million. Interestingly, the new owners of FTX Europe are pleased with the re-acquisition, stating the exchange’s European expansion was well on course prior to its global collapse.
Bankrupt Exchange Continues Asset Auctions In View Of Debt Repayment
FTX has continued to offload its assets as it looks to gather enough liquidity to pay off its creditors. Following the exchange’s spontaneous collapse in November 2022, it is estimated to owe its clients an estimated of $8 billion.
In addition to its most recent sale, the defunct trading platform recently gained court approval to trade off its $1 billion stake in AI startup company Anthropic. Meanwhile, FTX has also concluded the total sale of its 22 million shares of the GBTC Bitcoin ETF, raising another $1 billion. The crypto exchange already presented its elaborate restructuring plan, and these fundraising efforts via asset auctions are a critical part of the debt repayment strategy.
Total crypto market valued at $1.921 trillion on the weekly chart | Source: TOTAL chart on Tradingview.com
Featured image from Medium, chart from TradingView
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Author: Semilore Faleti
