Bankrupt crypto exchange FTX has filed legal papers proposing the sale of its subsidiary, Digital Custody, to CoinList for $500,000.

The price tag is in stark contrast to the initial $10 million FTX spent to buy Digital Custody back in 2021 — a 95% markdown.

The crypto exchange intended Digital Custody to be a key asset in providing custodial services to its U.S. operations, FTX US and LedgerX.

However, Digital Custody never fully synced with FTX’s operations before the bankruptcy filing by former CEO Sam Bankman-Fried in November 2022.

With FTX US still moribund and LedgerX sold off, the legal team argued in its filing that Digital Custody’s role is effectively redundant, spurring the decision to divest at a deep discount.

The proposed sale to CoinList is expedited by a favorable existing relationship with Digital Custody’s original CEO, Terence Culver, something FTX’s lawyers believe will help smooth regulatory pathways. 

To reflect the urgency of their circumstances, the team has even incorporated a provision for a reverse termination fee of $50,000, demonstrating a commitment to a swift and decisive closure of the sale.

FTX asset liquidation gathers pace
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Author: Julius Mutunkei

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