According to court documents dated Thursday, bankrupt cryptocurrency exchange FTX seeks to keep its Dubai branch out of the wind-down procedures in the United States.
In November of last year, FTX initiated Chapter 11 litigation for 102 related corporations from all around the world. One of the entities included in the proceedings was FTX Dubai, which was founded in February 2022 and is controlled by the company’s European arm.
However, the bankrupt estate claimed in the statement asking for the dismissal of the unit that FTX Dubai “has no reasonable likelihood of rehabilitating its operations” because it had no operations previous to the bankruptcy filing in the United Arab Emirates (UAE).
Additionally, FTX Dubai has a healthy balance sheet. The petition stated that the debtors “believe that a solvent voluntary liquidation procedure in accordance with the laws of the United Arab Emirates would allow for a timely distribution of the positive cash balance following payment of all outstanding debts and asset liquidation.” The estate contends that any court orders issued while FTX Dubai was a party to the proceedings should stand, but that the dismissal requested “is necessary” to protect the debtors and give them the authority to, for example, pay pre-bankruptcy wages and salaries, as well as other compensation, benefits, and expenses to Dubai employees. On August 23, there will be a hearing on the subject.