In a recent legal move, cryptocurrency exchange FTX has filed a motion to have its Dubai-based unit excluded from U.S. bankruptcy proceedings.
The exchange, which filed for bankruptcy in the U.S. in November 2022, initiated Chapter 11 cases for 102 associated entities worldwide, including FTX Dubai, established in February 2022 and owned by the company’s European arm.
In the recent court filing, the bankrupt exchange argued that FTX Dubai did not conduct any business in the United Arab Emirates (UAE) before the bankruptcy filing and, therefore, “has no reasonable likelihood of rehabilitating its operations.”
“Additionally, FTX Dubai is a balance sheet solvent. Therefore, the Debtors believe that a solvent voluntary liquidation procedure following the laws of the United Arab Emirates would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets,” the filing said.
As the legal battle unfolds, FTX remains committed to cooperating with authorities in the appropriate jurisdictions to ensure transparency and compliance with relevant laws.
FTX’s request to remove its Dubai unit from U.S. bankruptcy proceedings signifies the increasingly complex legal landscape that cryptocurrency businesses face as they operate globally.
The involvement of the Official Committee of Unsecured Creditors adds another layer of complexity to the bankruptcy proceedings, raising questions about the overall direction and outcome of the process.
The court is expected to reach a decision on the motion in the coming weeks.
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