FTX’s Clients Ask For A Good Understanding About The Plan To Sell 4 Subsidiaries

Key Points:

• FTX’s client requested to make its plan to sell 4 of its subsidiaries publicly.
• They argue that this is necessary because it is possible that “customer money is embezzled” to be used to acquire or maintain companies.
• The commission asked the judge to allow them to serve as “consultants” so they could ensure the client’s interests were represented throughout the bidding process.

FTX’s clients asked for clarification on their plans to sell four subsidiaries, arguing that the client’s assets on the platform belong to the client and not FTX.

A special committee of 18 non-US citizens made limited objections to bankrupt company’s plan to sell four independently operated subsidiaries last December, arguing that they should understand the process of sale to ensure that the interests of the customer are represented.

In the argument, they are also concerned that “embezzled customer funds” could be used to acquire or maintain companies. This group of customers has claims against FTX totaling more than $1.9 billion.

In the filing, the committee argued that previous public statements by the FTX, SEC, and CFTC made it clear that client assets on the platform belonged to the client, not FTX.

It had “substantial concerns about the lack of information about businesses involved in the sale” and questioned whether those businesses were “necessary for the ability to restart” FTX.

The commission asked the judges to allow them to act as “consultants” so they could ensure the client’s interests were represented throughout the bidding process.

“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.”

It is conceivable that an objection has the same limitations as an objection, except that it only applies to a specific part of the proceeding. In this case, the limited complaint was because the Special Committee was excluded from the sales process. The commission requested to remove his identifying information from bankruptcy documents on December 30.

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