FTX Seeks To Remove Dubai Subsidiary From US Bankruptcy Proceedings

Key Points:

• FTX seeks to exclude Dubai subsidiary from US bankruptcy proceedings, aiming for a voluntary liquidation process under UAE law.
• The Dubai branch’s solvent status and lack of prior business activities are cited as reasons for pursuing an independent liquidation path.

The platform has filed court documents with the aim of excluding its Dubai subsidiary, FTX Dubai, from the ongoing liquidation process in the United States. 

According to the filing, the Dubai branch had not conducted any business activities prior to its bankruptcy filing in the United Arab Emirates (UAE), making the resumption of operations unlikely. Moreover, FTX Dubai’s balance sheet was solvent, providing grounds for a voluntary liquidation process under UAE law. The voluntary liquidation would facilitate the timely distribution of the cash balance after settling all outstanding debts and liquidating assets. A hearing on this matter is scheduled for August 23.

The Chapter 11 bankruptcy petition that was filed in the United States included 102 associated businesses and organizations from across the world. One of the entities that are participating in the present legal processes is FTX Dubai, which was founded in February 2022 and is currently controlled by the company’s European affiliate.

FTX‘s move to remove the Dubai branch from the US bankruptcy proceedings highlights its intention to handle the subsidiary’s liquidation under the laws of the UAE, where it operates. By opting for a solvent voluntary liquidation process, the platform aims to expedite the distribution of funds and complete the settlement of obligations swiftly.

This legal development sheds light on the complexities and considerations involved in global cryptocurrency exchange operations and legal proceedings. As cryptocurrency markets continue to expand internationally, exchanges must navigate varying regulatory frameworks and jurisdictional implications to safeguard their interests and assets. The outcome of the upcoming hearing on August 23 will determine whether FTX Dubai’s liquidation process will remain under US bankruptcy proceedings or proceed independently under UAE law.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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