Wednesday, April 24, 2024
HomeLaw & PoliticsFTX Sells European Division Back to Founders Amid Bankruptcy Resolution

FTX Sells European Division Back to Founders Amid Bankruptcy Resolution

The bankrupt cryptocurrency exchange FTX has successfully resolved a legal dispute concerning its European division by agreeing to sell it back to its original founders for $32.7 million. This development, reported by Reuters on February 24, suggests that FTX faced challenges in finding alternative purchasers for FTX Europe, which was previously acquired in 2021 for $323 million when it was known as Digital Assets AG, a Swiss startup.

FTX’s attempt to divest FTX Europe comes after efforts to recoup the substantial funds expended on the acquisition. The exchange had initiated legal action, contending that the purchase was funded using customer deposits and asserting that the acquisition price constituted a significant overvaluation. In response, the startup’s founders, Patrick Gruhn and Robin Matzke, refuted these claims and launched a counterclaim, demanding $256.6 million from FTX. The protracted dispute was eventually settled on February 21, as reported by Reuters.

The inclusion of FTX Europe in FTX’s Chapter 11 bankruptcy filing in the United States in November 2022 sparked interest from various cryptocurrency exchanges seeking to capture a portion of FTX’s market share in Europe. Notable among these was American crypto exchange Coinbase, which made acquisition attempts in November 2022 and again in September 2023. Other crypto firms, including Trek Labs and Crypto.com, also expressed interest in acquiring the European division.

FTX Europe had a brief operational period in the region, lasting only eight months. In March 2023, the company established a website for European customers to initiate withdrawal requests for the first time since the bankruptcy declaration.

As FTX navigates the concluding phases of its bankruptcy proceedings, the company is focused on reimbursing its customers, with plans to repay billions of dollars. Part of FTX’s strategy to amass funds for creditors involved receiving court approval on February 22 to sell off over $1 billion in shares of Anthropic, an artificial intelligence company. This move is part of FTX’s broader efforts to liquidate assets and settle its financial obligations to its stakeholders.

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

four × 5 =

- Advertisment -

Most Popular