FTX Faces Uphill Task To Sell LedgerX, Other Businesses

FTX has failed to provide complete financial disclosures regarding the entities it intends to sell, a US bankruptcy trustee said

article-image

Source: Shutterstock / K illustrator Photo, modified by Blockworks

share

Andrew Vara, the US bankruptcy trustee in FTX’s case, on Saturday filed an objection to the bankrupt company’s plans to sell four of its businesses, arguing FTX has provided “very little information” on what is being sold. 

The businesses include crypto derivatives exchange and clearing house LedgerX, custody platform Embed, FTX Japan and FTX Europe.

Vara wrote in his Delaware court filing that FTX hasn’t outlined their financial affairs including assets and liabilities of each entity, and that it’s looking to delay this documentation until after the sale hearings.

“Without these filings, there is no information regarding the nature or value assets of the Debtors whose businesses the Debtors seek to sell,” he said.

Vara called for an independent investigation into the businesses before they can be sold, suggesting that “there is serious concern” about them being involved in FTX’s bankruptcy and holding related information.

“The sale of potentially valuable causes of action against the Debtors’ directors, officers and employees, or any other person or entity, should not be permitted when there has been serious allegations of wrongdoing, and no investigation yet into the scope of such wrongdoing, or the persons and entities that may have been involved,” the filing said.

FTX filed for bankruptcy in November, then sought court approval to sell four affiliated businesses on the grounds that they were supposedly solvent and that each was relatively independent of the parent company.

Lawyers for the exchange stressed that they wanted any sale process to be quick, as the business value could decline due to suspended operations. Some 111 parties were interested in purchasing either one or more businesses as of the last update.

Vara also suggested that the sale should not be allowed since FTX insiders have been criminally charged, and their counterparts working at subsidiaries should not be overlooked.

A hearing on the matter is scheduled for Wednesday, Jan. 11 at 9:00 am ET.

Former FTX CEO Sam Bankman-Fried was arrested last month and is currently under house arrest as he awaits his October trial. While he has pleaded not guilty to criminal charges, his former colleagues Caroline Ellison and Gary Wang have pleaded guilty to federal charges and are cooperating with investigators

US prosecutors are now reportedly inspecting former FTX chief of engineering Nishad Singh for his role in connection with the exchange’s fraudulent practices.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

Sponsored

Connect in one click from any device to help build a verifiable world and earn rewards

article-image

The Flippening was always a meme, but for a moment it wasn’t so funny

article-image

Frachtis is focused on pre-seed and seed rounds in both consumer apps and AI

article-image

Markets look forward, even when we can’t see past the news

article-image

Solana’s price run might stall as ETH gains institutional favor

article-image

The soccer club is using the XRP-compatible Root blockchain and is expected to release a mobile racing game, too