FTX Update | Court Approves Asset Liquidation, Reorganizes Team to Pursue $400 Million Investment from Modulo Capital

The FTX event has only made sporadic progress, and the restructured team is still actively selling assets to raise more cash. According to the latest approved motion, the restructured team is now able to sell a portion of the $5.4 billion initially invested by Alameda, but only for projects valued at $1 million or less.

Court Approves Sale of Certain FTX Assets

The FTX bankruptcy team had filed a motion on January 18, emphasizing that many projects previously invested in by FTX were very willing to repurchase the equity held by FTX, hence requesting court approval.

According to The Block, Delaware bankruptcy court judge John Dorsey approved the motion on February 13, allowing the bankruptcy team to sell or transfer the least valuable assets compared to the total value of FTX assets.

As reported last year, Alameda made illiquid investments in over 500 projects in a portfolio worth approximately $5.4 billion, with investment amounts ranging from hundreds of millions of dollars to as low as $250,000 in start-up platform owners.

The court specified that assets to be sold in the process must have a value below $1 million, and it must be confirmed that FTX's initial investment amount was less than or equal to $5 million.

Pursuing Unnamed Venture Capitalist for $400 Million

The New York Times cited sources saying that bankruptcy lawyers and federal prosecutors are investigating the initial $400 million investment in Modulo Capital.

Modulo Capital, relatively unknown but receiving investments in the hundreds of millions, has not been found to have engaged in any illegal activities according to a source, and the venture capitalist's lawyers are seeking to absolve them of legal responsibility.

Bankruptcy Liquidation to Exclude Turkish Subsidiaries

The motion submitted in January by the bankruptcy team also includes the exclusion of FTX's Turkish subsidiaries, citing "low cooperation from Turkish authorities" as the reason for excluding the Turkish subsidiaries from the bankruptcy proceedings.

Reported in November last year, the Turkish Ministry of Treasury had announced the seizure of assets belonging to SBF and its subsidiaries, with the Financial Crimes Investigation Board (MASAK) investigating them for alleged fraud.

The bankruptcy team deemed it a waste of time to involve the subsidiaries FTX Turkey and SNG Investments in the bankruptcy proceedings.

This motion was also approved by Judge John Dorsey.