FTX Gets Greenlight To Sell LedgerX

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The bankrupt crypto platform, FTX, has received a green light to sell its LedgerX business for $50 million, raising additional funds to repay its creditors. During a hearing at Wilmington, a U.S. Bankruptcy judge, John Dorsey, approved FTX’s sale of LedgerX, its non-bankrupt crypto derivatives trading platform. The platform will be sold to an affiliate of Miami International Holdings.

However, Miami International Holdings owns the Bermuda Stock Exchange and various U.S. registered securities exchanges like the Miami International Securities Exchange. Notably, the Commodity Futures Trading Commission (CFTC) regulated LedgerX, which established its headquarters in Miami, Florida. However, LedgerX’s sale comes when FTX desperately attempts to acquire funds to pay off its creditors, who are roaring to see repayments made.

The exchange attempts to repay its customers an estimated $11 billion via asset sales and recoup actions. The exchange’s current CEO, John Ray III, has been going the extra mile to ensure this repayment action takes place as best as possible. Since filing for bankruptcy in November, the reports stipulate that FTX has recovered over $7.3 billion in cash and liquid crypto assets.

Nonetheless, on Wednesday, FTX noted that it would seek nearly $4 billion recoup from Genesis Global Capital (GGC), a bankrupt lending arm of Genesis crypto company. In a court filing, FTX noted that Genesis owes the platform money due to transactions that occurred shortly before the platform’s bankruptcy filing. Additionally, under U.S. bankruptcy law, the debtors can try to retrieve payments made 90 days before a bankruptcy filing. In that, the funds can be equitably distributed among creditors.

Genesis and FTX saga

According to the exchange company, Genesis was a primary “feeder fund” for Alameda Research, an FTX-affiliated hedge fund. The platform noted that Genesis loaned Alameda crypto assets that it later used for further investment and loans. At some point, Alameda Research held $8 billion in loans provided by Genesis, as per FTX. However, unlike other creditors, Genesis was largely compensated before FTX went bankrupt, the exchange noted.

Various platforms in the crypto lending ecosystem were caught up during a turbulent 2022 that saw many run into bankruptcy. FTX was not an exception. FTX, a once-significant crypto company, filed for Chapter 11 bankruptcy protection. This came amid allegations that founder and former CEO, Sam Bankman-Fried, used FTX customers’ money to prop up Alameda’s balance sheet.

SBF has been indicted on fraud charges for his role in the exchange’s collapse. However, he has pleaded not guilty to all the eight count charges that he has been accused of. Nonetheless, the former members of his inner circle, including Gary Wang, Co-founder of FTX,  have pleaded guilty and agreed to cooperate with prosecutors.

LedgerX Sell Finally Completed

In August 2021, FTX.US acquired LedgerX, making headlines. This was when FTX was in the good books of crypto enthusiasts. However, the sale of LedgerX was discussed as far back as December 2022. Notably, the discussions included FTX’s European and Japanese digital assets subsidiaries at that particular time.

On the other hand, the CFTC was closely looking at LedgerX after FTX’s demise, which was solvent as the exchange was going down. Further, it is yet to be clear what Miami International Holing’s long-term plans are. However, it s still light at the end of the tunnel for the exchange company.

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