Bankrupt cryptocurrency exchange FTX has taken steps to exclude its Dubai subsidiary from an ongoing restructuring process in the United States. The motion, filed on August 2, asserts that the Dubai branch had not engaged in any business operations prior to its bankruptcy filing. Consequently, The likelihood of the subsidiary resuming operations is considered low. A hearing regarding this matter is scheduled for August 23.
FTX highlighted in the court filing that its Dubai subsidiary, FTX Dubai, maintains a financially stable balance sheet. As such, the voluntary "liquidation process under United Arab Emirates law will allow for the timely distribution of positive cash balances after payment of all outstanding debts .” The subsidiary’s assets will be liquidated, and its solvent condition will facilitate the settlement of obligations and the distribution of remaining funds.
FTX Dubai is a direct wholly-owned subsidiary of FTX Europe, a company holding a Virtual Asset Service Provider license granted by the Dubai Virtual Assets Regulatory Authority (VARA). With roughly $4.5 million held in different accounts, $4 million of this amount is under VARA restrictions as security for the license. Following a communication from VARA on July 25th, FTX Dubai's management was informed that the restricted funds would be released in accordance with United Arab Emirates law upon the subsidiary's liquidation.
It is noteworthy that the majority of FTX Dubai's operations have occurred within the United Arab Emirates, and the decision to undergo local voluntary liquidation aligns with the debtor's best interests as well as the interests of its estate.
