FTX Began a Global Asset Review as Bankruptcy Managers Sought to Preserve Viable Businesses

FTX’s Chapter 11 debtors launched a review of their global assets on November 19, 2022 and began preparing selected businesses for possible sale or reorganization, the failed cryptocurrency exchange group announced eight days after entering bankruptcy.

The debtors said they had engaged Perella Weinberg Partners as lead investment bank, subject to court approval. The mandate was to identify businesses whose operating franchises could retain value despite the breakdown of FTX’s wider corporate structure. It represented an early attempt by the new management team to separate potentially viable subsidiaries from the insolvent and poorly documented group around them.

The estate looked beyond a single exchange

The announcement covered FTX Trading Ltd. and approximately 101 affiliated debtors. Chief executive John J. Ray III said the initial review indicated that many regulated or licensed subsidiaries inside and outside the United States had solvent balance sheets, functioning management and valuable franchises.

That assessment was a contemporaneous statement from FTX’s new management, not an audited finding or a court determination. The company did not publish subsidiary-level valuations on November 19, set a timetable for transactions or estimate what any sale might return to customers and other creditors.

Ray identified LedgerX LLC and Embed Clearing LLC as examples of subsidiaries outside the Chapter 11 cases. FTX Japan K.K., Quoine Pte. Ltd., FTX Turkey Teknoloji Ve Ticaret A.Ş., FTX EU Ltd., FTX Exchange FZE and Zubr Exchange Ltd. were among the debtor subsidiaries management said could be considered for sales, recapitalizations or other transactions.

The distinction mattered institutionally. Licences, customer relationships, employees and operating systems could carry value independently of the FTX.com trading platform, but only if those businesses could continue functioning while advisers reconstructed the group’s records and ownership relationships.

Court motions exposed the preservation problem

On November 19, the debtors also filed motions in the U.S. Bankruptcy Court for the District of Delaware seeking authority to establish a new global cash-management system and make certain vendor payments. A hearing was scheduled for November 22.

Docket No. 46 requested permission to pay as much as $9.3 million in pre-bankruptcy claims to critical vendors after an interim order and as much as $17.5 million after a final order. These were proposed ceilings, not payments already made or relief already granted.

The filing said interruption by certain vendors could create security risks, data loss or other disruptions that would reduce estate value. Potential critical vendors included providers supporting regulated exchanges, specialized software and technical infrastructure, as well as businesses providing cryptocurrency custody or security services.

The requested amounts were estimates based on available general-ledger information and generally represented about one and a half months of average spending for selected vendors or categories. That methodology was necessarily limited: the debtors acknowledged that their books were incomplete and that they had not yet identified every critical or foreign vendor. As of the filing, no creditors’ committee, trustee or examiner had been appointed.

What November 19 established

The verified development was the start of an asset-preservation and transaction review under new management. It did not establish the value of FTX’s assets, the size of any customer shortfall or the solvency of the consolidated group. Nor did the announcement guarantee that a buyer would emerge or that regulators would permit individual businesses to continue operating.

For the cryptocurrency industry, the review showed how an exchange collapse could become a cross-border restructuring of regulated entities, technology providers and trading businesses rather than a single-platform liquidation. For creditors, however, the November 19 record offered a process—not a recovery estimate. The estate was still attempting to identify its cash, preserve essential services and determine which parts of FTX’s global network remained saleable.