Crypto titan FTX is planning to sell its subsidiary, Digital Custody Inc. (DCI), which it purchased in two separate $5 million deals in December 2021 and August 2022. Quite intriguingly, FTX is letting go of this asset to CoinList for just $500,000. The financing for this deal comes from a familiar name – Terence J. Culver, the original CEO of DCI.
FTX landed DCI with the initial intent of bolstering custodial services for FTX.US and LedgerX. But the venture went off the rails when the integration into the FTX ecosystem failed, and former CEO, Sam Bankman-Fried, declared bankruptcy in November 2022. In light of this downfall and FTX’s inability to relaunch FTX.US, the firm’s lawyers stated that DCI became an invaluable asset in their portfolio.
However, DCI still holds a valuable banking license from South Dakota, which sanctions it to provide custodial services. Upon Courting offers from three potential buyers, FTX picked CoinList, asserting that it provides the best deal and guarantees swift execution of the sale. Culver’s past relationship with DCI was also considered crucial in securing a rapid regulatory approval for the transaction.
The transaction has the green light from the Committee and the Ad Hoc Committee of Non-US Customers of FTX.com. According to the deal’s terms, FTX has a window of three days before the closing to scout for a better offer for its subsidiary. Also, a $50,000 reverse-termination fee will be triggered if the buyer fails to finalize the deal.