The FTX Debtors estate, under the leadership of CEO John Ray III, is moving forward with the sale of another asset, Digital Custody Inc. (DCI), as part of its ongoing bankruptcy proceedings. Acquired by FTX in two transactions totaling $10 million in December 2021 and August 2022, DCI is set to be sold to CoinList for a fraction of its purchase price, at just $500,000. The sale will be financed by DCI’s original CEO and seller, Terence J. Culver.

DCI, initially purchased to serve as a custodial service provider for FTX.US and LedgerX, was never fully integrated into FTX’s operations. Following the bankruptcy filing by former CEO Sam Bankman-Fried in November 2022, the asset has been deemed superfluous to the estate’s needs, especially in light of the sale of LedgerX and the unlikely prospect of relaunching FTX US.

Despite its diminished value to FTX’s estate, DCI holds a valuable license from the South Dakota Division of Banking, enabling it to offer custodial services. The decision to sell to CoinList came after considering offers from three interested parties, with CoinList’s bid chosen for its favorable terms, swift execution timeline, and Culver’s involvement, which is expected to facilitate regulatory approval for the transaction.

The sale has received endorsements from the Committee and the Ad Hoc Committee of Non-US Customers of FTX.com. However, FTX retains the option to seek a better offer for DCI up until three days before the sale’s closing. Should the purchaser fail to finalize the deal, a reverse-termination fee of $50,000 will be enforced.

This transaction represents another step in the FTX Debtors estate’s efforts to liquidate assets and navigate through its bankruptcy, aiming to provide some restitution to its creditors and affected customers.