FTX Trading has sold the European arm of its operations, FTX Europe, to its original founders as part of ongoing bankruptcy proceedings as the defunct crypto exchange continues to recover assets ahead of a planned vote on a reorganisation plan expected in second quarter of this year.
Digital Assets AG was initially a small Swiss startup specialising in accounting and billing software for crypto companies, before branching into the derivatives trade, when Sam Bankman-Fried paid $323 million for it in 2021.
The relatively unknown startup became the focal point for FTX operations in Europe before the well documented FTX collapse. Following the collapse, FTX attempted to recover funds from the founders of Digital Assets AG citing the USD$323 million price tag as a "gross overpayment".
The founders, Messrs Patrick Gruhn and Robin Matzke, denied the allegations and counter-claimed for USD$256.6 million from FTX. The dispute was resolved on the grounds that the original founders will buy back Digital Assets AG for USD$32.7 million, around one tenth of the price initially paid by FTX.
The bitter sweet sale sees an additional $32.7 million recovered for customers who lost money with FTX.
Creditors of FTX may be in higher spirits, however, considering the FTX creditor distributions look more and more likely to close in on 100c in the dollar, and following the arrest of the suspected culprits in a sim-swapping attack that siphoned USD$400 million from FTX during the collapse.
As a part of its strategy to recover assets for its creditors, the company was also granted approval on February 22 to sell off over $1 billion in shares of the artificial intelligence firm Anthropic.
With crypto prices and asset recoveries continuing to rise, and despite widespread misappropriation of customer assets prior to the collapse, it looks increasingly like FTX creditors will not end up losing their shirts afterall.
By Michael Bacina, Steven Pettigrove and Luke Misthos