CoinList to Acquire FTX’s Digital Custody Subsidiary in Cut-Price Deal
The FTX Debtors estate, under the leadership of CEO John Ray III, has initiated the process of selling Digital Custody Inc. (DCI) to CoinList.
FTX had previously acquired the subsidiary in two separate transactions, one in December 2021 and the other in August 2022, for a total of $10 million.
However, CoinList will now acquire DCI for a significantly reduced price of $500,000.
The financing for the deal will be provided by Terence J. Culver, the original CEO and seller of Digital Custody.
According to FTX’s lawyers, the acquisition of DCI was intended to offer custodial services for FTX.US and LedgerX.
Unfortunately, due to former CEO Sam Bankman-Fried’s bankruptcy filing in November 2022, the integration of DCI into the FTX ecosystem never materialized, rendering the subsidiary essentially worthless to the FTX estate.
Despite its limited value to FTX, Digital Custody still holds a license from the South Dakota Division of Banking, allowing it to provide custodial services.
After receiving offers from three interested parties, including Culver, the Debtors selected CoinList as the preferred purchaser based on their superior offer, ability to complete the transaction quickly, and their existing relationship with Culver.
FTX file motion to sell Digital Custody for $500k which FTX bought for $10m to Terrence Culver (person who sold DCI to FTX for $10m)
A&M (UCC/Ad hoc agrees) says this reflects a fair price for the valuable license from South Dakota that allows it to provide custody pic.twitter.com/QZ8XGVoHQ8
— Sunil (FTX Creditor Champion) (@sunil_trades) February 10, 2024
The Debtors believe that CoinList’s association with Culver will be advantageous in expediting regulatory approval for the sale.
FTX’s lawyers have disclosed that
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