Back to the list

FTX resolves European division dispute

source-logo  cryptopolitan.com 25 February 2024 03:11, UTC

Let’s cut straight to the chase. The once high-flying and now bankrupt crypto giant FTX has finally hammered out a deal over its European operations, putting to bed a dispute that’s been more tangled than headphone wires in your pocket. They’ve decided to hand over FTX Europe back to its original masters for a cool $32.7 million. This move pretty much screams, “We couldn’t find anyone else to take it off our hands,” considering they initially bought this Swiss startup, Digital Assets AG (DAAG), which morphed into FTX Europe, for a whopping $323 million back in 2021.

Now, before we dive deeper, let’s get something straight. FTX tried every trick in the book to claw back the cash it splurged on this acquisition. They went as far as suing, claiming they used customer funds for the buy and that they paid way more than they should have. Patrick Gruhn and Robin Matzke, the brains behind the startup, weren’t having any of it. They hit back, demanding $256.6 million from FTX. Finally, after what must have felt like a never-ending game of legal ping pong, they called it quits on the dispute on February 21.

The Plot Thickens

Post-bankruptcy, every crypto exchange with a pulse wanted a piece of FTX Europe, hoping to carve out their share of the market. Names like Coinbase made a beeline for it, trying not once but twice to seal the deal. Others like Trek Labs and Crypto.com also threw their hats in the ring. Despite the chaos, FTX Europe managed to keep the lights on for its European clientele, launching a site in March 2023 for withdrawal requests — a move akin to opening the emergency exits after the plane’s already landed.

Amidst wrapping up its bankruptcy saga, FTX has been on a mission to settle its debts, promising to pay back billions to its customers. They even got the green light to offload over $1 billion in shares of Anthropic, an AI firm, as part of their grand plan to fill the financial black hole they’re staring into.

Sam Bankman-Fried, or SBF as the cool kids call him, made a courtroom appearance, shedding his media invisibility cloak for one of the first times since his conviction. He was there to sort out a potential conflict of interest with his legal team, giving the nod to being represented by lawyers who are also juggling another high-profile client, former Celsius CEO Alex Mashinsky. This legal merry-go-round saw SBF waiving his right to a conflict-free defense, a move that’s as eyebrow-raising as it is strategic.

Related Developments

Sam Bankman-Fried, the former CEO of FTX, recently made an appearance in court, marking one of the few times he’s been seen publicly since his incarceration. This event comes as the lead-up to his sentencing on March 28 intensifies, offering a glimpse into the post-conviction phase of a figure who once sat atop the cryptocurrency world. Photos have emerged showing Bankman-Fried among other inmates.

This court visit spotlighted Bankman-Fried’s decision to forego the right to lawyers free of potential conflicts of interest, aligning himself with attorneys Marc Mukasey and Torrey Young. These lawyers also represent another high-profile figure in the cryptocurrency industry, Alex Mashinsky, former CEO of Celsius.