Customers interfered with FTX’s plan to sell subsidiaries

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Crypto Regulation
Customers interfered with FTX’s plan to sell subsidiaries

FTX’s clients have filed a limited objection to the organization’s liquidation procedures for the four subsidiaries. They seek the rights of customers to have up-to-date information regarding the process.

18 FTX clients baffle over subsidiaries liquidations

Amid the crypto ecosystem fallout, a group of 18 client members of the collapsed crypto exchange FTX has battled against the company’s decision to sell four distinct and independently functioned subsidiaries. They argued that they should be included to ensure user interests were represented.  

The cohort has concerns that client money may have been utilized to maintain or acquire these businesses. As such, they have formed an ad hoc advisory board of non-US citizens and filed the constrained opposition on Dec. 4. The committee now has a claim against FTX totaling over $1.9 billion.

The committee contended that preceding public comments by FTX, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) emphasize that the user resources pertain to clients, not to the bankrupt exchange.

Committee laments on inadequate information

The committee expressed critical concerns over inadequate data on the sale of the corporation. It laid queries on whether the firms could be necessary for a potential restart of FTX.

The committee also requested a permit to serve as the consulting professional to ensure clients have been catered to during the bid process. They explained that they do not seek to object to value-maximizing transactions that debtors may pursue so long as the interest of the ill-fated exchange customers is serviced.

On Dec. 15, FTX requested permission from the bankruptcy proceedings to sell its Japanese and European branches, the derivatives exchange LedgerX, and the stock-clearing platform Embed. These are the subsidiaries that the committee is seeking transparency in their sale.

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Samuel Mbaki Wanjiku

Samuel is an adventurous person who likes to explore topics in-depth and learn new things each day. His passion lies in gaining knowledge to help transform the world through his writing skills. He also believes in blockchain technology and its potential to usher in a cashless society. Currently, he is pursuing a Computer Science Bachelor’s degree driven by his fascination with emerging technologies. He has writing experience of about three years in different fields and two in blockchain technology.