Bankrupt FTX wants the court to remove its Dubai subsidiary from the entities subject to U.S. bankruptcy proceedings, according to an Aug. 2 court filing.
FTX revealed that its Dubai subsidiary, licensed as a virtual asset service provider in July of the prior year, had conducted no business in the United Arab Emirates (UAE). Further, the FTX Dubai license expired last month after it was first suspended following FTX’s collapse last November.
Following this, FTX advised that since there was no “reasonable likelihood of rehabilitating its operations,” it would be better for the Dubai subsidiary to be liquidated in accordance with UAE laws. It added that FTX Dubai was balance sheet solvent.
If this request is granted, FTX Dubai will be removed from the list of 102 FTX-associated entities that filed for bankruptcy in the U.S. last November. However, the bankrupt exchange does not want the removal to impact the past orders made while the subsidiary was still part of its bankruptcy proceedings.
The court is scheduled to hear the matter by Aug. 23.
FTX Dubai holds $4.5M
According to the court filing, FTX Dubai holds approximately $4.5 million in several accounts, of which $4 million is currently restricted by Dubai’s Virtual Assets Regulatory Authority (VARA) as security for the license.
FTX stated that VARA confirmed that the restrictions on the cash would be lifted in accordance with local laws in the context of the liquidation of the Dubai subsidiary.
It added that the liquidation would “allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets.”
Per the court filing, FTX Dubai has outstanding liabilities of approximately $600,000, including employee payments, bank fees, and other intercompany payments.
Meanwhile, the bankrupt firm liquidators have submitted an initial restructuring proposal that suggested a restart of the exchange. However, that has met opposition from unsecured creditors because the plan ignores their recommendations
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