FTX to Sell Acquired Digital Custody Company for $500,000 After $10 Million Purchase

FTX to Sell Acquired Digital Custody Company for $500,000 After $10 Million Purchase
Photo by Vitalii Mazur / Unsplash

In a strategic move, FTX has filed for the sale of its subsidiary, Digital Custody Inc (DCI). The exchange had acquired the firm back in August 2022 for a substantial sum of $10 million. Digital Custody, a custodial service, was intended to bolster FTX's offerings, particularly for FTX.US and LedgerX.

However, the integration of Digital Custody into the ecosystem of the cryptocurrency giant was halted abruptly. Just three months post-acquisition, FTX filed for bankruptcy, leaving Digital Custody in limbo.

Now, FTX seeks to offload Digital Custody to CoinList for a mere $500,000. The purchase will be financed by none other than the former CEO of Digital Custody, Teren Calver.

FTX's legal representatives argue that the inability to relaunch FTX US renders the ownership of DCI virtually worthless. After considering offers from three different parties, the company has selected Calver and CoinList as the optimal candidate for the acquisition of Digital Custody.

It's worth noting that in February 2024, FTX also filed a motion to sell its stake in the AI startup Anthropic, amounting to 7.84%. The company has requested an expedited review process for this application.

In December 2023, reports surfaced indicating that the startup planned to raise an additional $750 million, valuing the company at $18.4 billion. In such a scenario, FTX's stake could exceed the value of $1 billion.

As a reminder, it was previously reported that FTX opted out of relaunching its platform and will undergo a liquidation process to facilitate the reimbursement of its clients' funds.

This series of strategic maneuvers underscores FTX's efforts to streamline its operations and divest itself of assets that no longer align with its core objectives. The sale of Digital Custody and the stake in Anthropic mark pivotal steps in this restructuring process.

FTX's decision to offload Digital Custody for a fraction of its acquisition cost reflects the challenges faced by the exchange amidst its bankruptcy proceedings. However, the sale presents an opportunity for CoinList to expand its offerings and further establish its presence in the cryptocurrency custody space.

For Teren Calver, the acquisition of Digital Custody represents a chance to leverage his expertise and revive a company that once held promise in the cryptocurrency industry. With CoinList's backing, Digital Custody may yet realize its potential and emerge as a key player in the evolving landscape of digital asset management.

As FTX navigates the complexities of its bankruptcy and restructuring, the sale of Digital Custody signals a strategic realignment aimed at fortifying the exchange's position in the competitive cryptocurrency market.