FTX, the giant crypto exchange that collapsed in 2022, has taken an important and significant step in its bankruptcy proceedings.
She will sell the company’s European branch, which it took over three years ago, back to the original owners.
Crypto exchange FTX “massively overpaid” for European branch
FTX has reached an agreement to sell FTX Europe back to its founders for $32.7 million. This was reported by the Reuters news agency on February 24th.
Originally called Digital Assets AG (DAAG), FTX Europe was a Swiss startup that was acquired in 2021 for a whopping $323 million
This means that FTX sells the stock back at a huge loss. This suggests that FTX had difficulty finding other buyers for the European branch. FTX concludes that this is the best decision for its creditors.
Before the transaction was completed, FTX attempted to recover the original cost of the acquisition. FTX even filed a lawsuit claiming that it “massively overpaid” for the acquisition.
Both parties sued each other
The original founders of DAAG had a different opinion. They denied the allegations and subsequently filed a lawsuit against FTX.
Both charges were dropped last week. FTX reports that it would have been unnecessarily expensive and time-consuming to proceed with the lawsuit. Former CEO Sam Bankman-Fried also could not testify. He has since been convicted and is in prison.
In 2022, when FTX was just going under, several companies were eager to take over the European branch. One of these parties was none other than Coinbase, the largest crypto exchange in the USA.
Crypto.com also reportedly showed interest in FTX Europe. However, no one was interested in the takeover anymore. Nevertheless, DAAG founder Robin Matzke is pleased about the sale:
“We are pleased to be able to quickly support payouts to EU customers,” said Matzke.
FTX also recently received permission from a judge to sell $1 billion worth of shares in Anthropic, an AI company.