CoinList Set to Purchase FTX’s Digital Custody Division in Discounted Agreement

The estate of the FTX Debtors, led by CEO John Ray III, has commenced the process of transferring Digital Custody Inc. (DCI) to CoinList.

FTX had earlier purchased the subsidiary through two distinct transactions, one in December 2021 and another in August 2022, totaling $10 million.

However, CoinList will now obtain DCI for a notably lower amount of $500,000.

The financing for this transaction will be supplied by Terence J. Culver, the initial CEO and seller of Digital Custody.

Digital Custody Never Integrated into FTX Ecosystem

As stated by FTX’s legal representatives, the acquisition of DCI was meant to provide custodial services for FTX.US and LedgerX.

Regrettably, due to the bankruptcy filing by former CEO Sam Bankman-Fried in November 2022, the integration of DCI into the FTX ecosystem did not occur, leaving the subsidiary virtually worthless to the FTX estate.

Despite its diminished value to FTX, Digital Custody still possesses a license from the South Dakota Division of Banking, permitting it to offer custodial services.

After receiving proposals from three interested parties, including Culver, the Debtors chose CoinList as the preferred buyer due to their superior offer, capability to complete the transaction swiftly, and their existing relationship with Culver.

FTX filed a motion to sell Digital Custody for $500k, which FTX acquired for $10m, to Terence Culver (the individual who sold DCI to FTX for $10m).

A&M (UCC/Ad hoc agrees) states this reflects a fair price for the valuable license from South Dakota that enables it to provide custody pic.twitter.com/QZ8XGVoHQ8

— Sunil (FTX Creditor Champion) (@sunil_trades) February 10, 2024

The Debtors are of the opinion that CoinList’s connection with Culver will facilitate a quicker regulatory approval for the sale.

FTX’s attorneys have revealed that both the Committee and the Ad Hoc Committee of Non-US Customers of FTX.com have endorsed the transaction.

However, as part of the agreement, FTX retains the right to evaluate more favorable offers for DCI up until three days prior to the deal’s closing.

A reverse-termination fee of $50,000 will be applied if the buyer fails to complete the transaction.

FTX to Sell AI Startup Anthropic

Last week, FTX sought authorization to divest its 8% stake in AI startup Anthropic Holdings.

In a motion submitted by FTX’s current CEO, the exchange requested approval to sell the stake and proposed two potential methods, including an auction or a private sale.

FTX also asked for a reduced timeframe for objections to be filed, with a court hearing set for February 22 to accelerate the deliberation process.

The specific price sought for the Anthropic shares has been redacted from the filing, as FTX’s legal team believes that public disclosure could impede the ability to secure higher offers for the stake.

Anthropic Holdings reached a reported valuation of up to $18 billion in December 2023, suggesting that FTX’s 7.84% stake could be valued at around $1.4 billion.

This valuation has generated optimism among victims of the FTX collapse, as FTX expects to have adequate funds to fully settle all customer and creditor claims.

Earlier this month, FTX also filed a motion in a Delaware court to sell its $175 million claim against the bankrupt digital financial services firm Genesis Global Capital.

Currently, claims against Genesis are trading at 65% of their face value, significantly higher than the 38% that Alameda Research claims are achieving.

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