TL;DR
- A US judge has approved the sale of LedgerX, the derivatives trading platform previously owned by FTX, to private equity firm M7 Holdings, at a loss of $250 million.
- The sale is a necessary step towards compensating former clients who lost money in FTX’s collapse last year, amidst allegations of criminal mismanagement by ex-boss and co-founder Sam Bankman-Fried.
While the sale marks another setback in the FTX saga, there is still potential for the cryptocurrency exchange to regain its footing and emerge as a major player in the industry.
FTX, the popular cryptocurrency exchange, has been granted court approval to sell the derivatives trading platform LedgerX, but at a significant loss. FTX.US, which caters to American customers, acquired the derivatives exchange in August 2021 for nearly $300 million. However, FTX’s highly publicized Chapter 11 bankruptcy proceedings last November left the CFTC-regulated trading platform as one of the only FTX entities that remained solvent. The green-lighted sale means the trading platform will now be sold for $50 million, which is only a fraction of what FTX paid for it. The sale is intended to reimburse former clients who lost money in FTX’s downfall.
In a Thursday hearing, Judge John Dorsey quickly authorized the sale to private equity firm M7 Holdings, saying, “Well, that was easy,” when no one voiced any objections. LedgerX CEO Zach Dexter announced on Twitter that he was “very pleased” to announce that the US Bankruptcy Court in Delaware had granted a motion permitting the sale.
FTX’s acquisition of LedgerX was seen as an exciting move that would allow the exchange to bring derivatives to American customers, with FTX’s founder and co-founder, Sam Bankman-Fried, describing it as “one of the most important things” the FTX brand did. However, FTX went bankrupt just a few months later, with Bankman-Fried now facing 13 criminal charges, including wire fraud and conspiracy to commit money laundering.
Although FTX’s reputation has taken a hit following its downfall, the exchange remains popular with users. FTX allows people to buy, sell, and bet on the future price of digital assets. Despite the ongoing legal troubles, the exchange is still in operation, with Bankman-Fried’s face still visible on ads around San Francisco.
As FTX looks to move past these difficult times, it remains to be seen what the future holds for the cryptocurrency exchange. However, with the rapid growth of the cryptocurrency market and increasing institutional adoption, there is still potential for FTX to regain its footing and emerge as a major player in the industry once again.
While the sale of LedgerX at such a massive loss may be a tough pill to swallow for FTX, it is a necessary step towards compensating former clients and addressing the fallout from the exchange’s downfall. As the cryptocurrency market continues to evolve and new players enter the scene, it will be interesting to see how FTX adapts and navigates this ever-changing landscape.
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