FTX Dubai, an offshoot of the now-defunct FTX crypto exchange, is asking to be excluded from US bankruptcy proceedings. The company was created just a few months prior to its parent’s November collapse and claims it had no business activity before then.
The collapse of FTX rocked the crypto industry in 2022, leaving thousands of investors without their money. Founded by Bankman-Fried in 2018, FTX has become one of the biggest and most popular exchanges in the US and beyond.
However, lack of adequate management, overleveraging and subsequent liquidity issues resulted in its downfall in November of the previous year. Many investors were closely monitoring FTX US news for updates on the status of their investments.
As part of the proceedings, the exchange brought its 102 affiliated entities from around the world into the mix as well. This has caused some issues, such as with FTX Dubai, which states that it had no business activity before the collapse and was owned by FTX’s European arm.
According to court documents, FTX Dubai is a “balance-sheet solvent,” meaning that the company can pay out all of its outstanding liabilities and liquidate all assets after a timely distribution of its positive cash balance as a result of a “solvent voluntary liquidation procedure in accordance with the laws of the United Arab Emirates.”
FTX Dubai has stated that there is little chance of the company being able to resume its operations and is only seeking the means to cover employee wages and benefits.
The case will be heard at the end of this month. As one of many affiliated entities around the world in FTX’s legal proceedings, FTX Dubai could provide a blueprint for other sister companies.For now, investors will have to wait for more information on FTX US news.