Beleaguered crypto exchange FTX (CRYPTO: FTT) has submitted a court request to exclude its Dubai subsidiary from the ongoing restructuring process in the U.S.
According to the court document filed on Aug. 2, FTX asserted that its Dubai branch had not engaged in any business activities prior to the bankruptcy declaration, making it unlikely that the subsidiary will revive its operations.
The court is set to commence its initial hearing on this matter on August 23.
In the document, FTX highlighted that FTX Dubai is solvent in terms of its balance sheet.
As a result, a voluntary “liquidation procedure in accordance with the laws of the United Arab Emirates would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets.”
FTX Dubai, a fully owned subsidiary of FTX’s European division, holds a virtual asset service provider license from Dubai’s Virtual Assets Regulatory Authority (VARA).
The Dubai subsidiary currently has about $4.5 million across various accounts, with $4 million of it being held by VARA as security for the license.
On July 25, VARA assured FTX Dubai’s management that the restricted cash would be released during the liquidation of FTX Dubai, in line with the United Arab Emirates law.
The filing stated, “All of FTX Dubai’s assets are located in the United Arab Emirates and substantially all of FTX Dubai’s prepetition activities occurred in the United Arab Emirates, the Debtors have determined that a timely local voluntary liquidation of FTX Dubai in accordance with the laws of the United Arab Emirates is in the best interests of the Debtors and their estate.”
FTX Dubai is anticipated to enter into a contract with the appointed liquidator to establish basic administrative procedures and facilitate the orderly and efficient administration of the liquidation.
The main headquarters is still reeling in from the collapse and from the arrest of Sam Bankman-Fried, who was arrested on the charges of fraud.
Bankman-Fried pleaded not guilty on the counts of defrauding investors where he used investor money to mismanagement the company’s balance sheet.
Current FTX CEO, John J. Ray III, unveiled the reboot strategy for FTX that would facilitate debtors as an “offshore crypto exchange.”
The FTX Dubai subsidairy held about $4.5 million in several accounts that is currently restricted by Dubai’s Virtual Assets Regulatory Authority.
Produced in association with Benzinga
Edited by Alberto Arellano and Newsdesk Manager
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