FTX Asks Court to Remove Dubai Unit from US Bankruptcy Proceedings

FTX wants its subsidiary based in Dubai to be excluded from its ongoing bankruptcy proceedings in the US. According to a court document filed today (Thursday), the bankrupt cryptocurrency exchange argued that this step would allow for a timely distribution of money owed to creditors.

“Additionally, FTX Dubai is balance sheet-solvent,” the filing stated. “Therefore, the debtors believe that a solvent 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 Eyes Bankruptcy Exit

Besides that, the debtors of the exchange told the court that excluding FTX Dubai from the bankruptcy proceedings in the US would enable the company to meet its immediate obligations, such as paying wages and salaries. The matter was filed in the US bankruptcy court for the District of Delaware and is scheduled to be heard on August 23.

After FXT filed for bankruptcy in November last year, the company began bankruptcy cases for more than 100 of its affiliated entities, including FTX Dubai. The subsidiary, which is owned by FTX Europe, was created in February 2022. However, according to Thursday’s filing, FTX Dubai did not offer cryptocurrency services before the global exchange sought bankruptcy protection.

Similarly, in January, FTX sought similar court orders to exclude its business units in Turkey from the ongoing bankruptcy proceedings in the US. In a court filing then, the exchange told the court that the Turkish authorities were unlikely to act on the orders from the US courts.

FTX Turkey

Immediately after the collapse of FTX, the Turkish Financial Crimes Investigation Board seized the exchange’s assets and began an investigation against its former CEO, Sam Bankman-Fried. In an official announcement, the Turkish authorities accused FTX of not preserving customers’ trust and faulted Bankman-Fried for suspicious criminal activities.

Meanwhile, at the beginning of the week, FTX proposed to a section of its claimants a plan to relaunch the operations of the offshore exchange in collaboration with third-party investors, Finance Magnates reported. According to the court documents, the debtors will forgo their refunds in exchange for shares in the proposed entity.

This article was written by Jared Kirui at http://www.financemagnates.com.