FTX Customers Demand More Data On Plans To Sell Subsidiaries

FTX customers has filed a limited objection to FTX’s plan to sell four independently operated subsidiaries. Arguing that they should be able to participate in the sales process to ensure their interests are represented.

iexclusivenews reports the group has also shared concerns that “misappropriated customer funds” may have been used to acquire or keep these firms running.

This online news outlet understands that the limited objection was filed on Dec. 4 by an ad hoc committee of non-U.S. customers. Which comprises 18 members who collectively have claims against FTX in excess of $1.9 billion.

The committee argued in its filing that previous public statements by FTX, the Securities and Exchange Commission. And the Commodity Futures Trading Commission make it clear that the customer assets on the platform belong to customers, not FTX.

It said there were “significant concerns over the lack of information regarding sale of the businesses,” and also questioned whether the businesses may be “necessary to a potential restart” of FTX.

A limited objection is similar to an objection in that it applies only to a portion of the proceedings. In this case, the limited objection stems from the ad hoc committee’s exclusion from the sale process.

What You Should Know

The committee has requested that the judge allow them to act as “consulting professionals” to ensure that customers’ interests are represented throughout the bidding process, adding:

“The Ad Hoc Committee does not seek to stand in the way of value-maximizing transactions that the Debtors may pursue, so long as the interests of FTX.com customers are protected.”

Only consulting professionals will be able to attend the auction and consult with FTX on matters relating to the sale process under the proposed bid procedures.

And the committee notes that the consultation parties have no control over the process other than the ability to provide counsel.

On Dec. 15, FTX had asked the bankruptcy court to allow them to sell off its European and Japanese branches. In addition to derivatives exchange LedgerX and stock-clearing platform Embed.

LedgerX in particular has been hailed as a success story during the bankruptcy proceedings, with Commodity Futures Trading Commission Chairman Rostin Behnam.

Noting that the firm had essentially been “walled off” from other companies within FTX Group, and “held more cash than all the other FTX debtor entities combined.”

However, iexclusivenews Nigeria reports that last week, the same committee asked for customers’ names and private information to be redacted from court documents. Suggesting that customers could be exposed to identify theft, targeted attack and “other injury.”