CoinList plans to acquire FTX’s Digital Custody Inc. at discounted price

CoinList is poised to acquire Digital Custody Inc. (DCI) from the FTX Debtors estate, marking a significant move within the cryptocurrency landscape. The deal, handled by FTX CEO John Ray III, represents a strategic decision in response to the evolving landscape of digital asset custody services. The acquisition comes after FTX’s prior purchase of DCI in two transactions, one in December 2021 and another in August 2022, amounting to a total investment of $10 million.

However, due to changes in circumstances, CoinList is set to secure DCI at a substantially reduced cost of $500,000. Terence J. Culver, Digital Custody’s original CEO and seller, will handle the financing for this acquisition. This cut-price deal raises questions about the valuation dynamics and emphasizes the fluidity of the cryptocurrency market.

FTX initially acquired DCI with the intention of incorporating its custodial services into FTX.US and LedgerX. Unfortunately, the plans were thwarted by the bankruptcy filing of former FTX CEO Sam Bankman-Fried in November 2022. This rendered the subsidiary less valuable to the FTX estate, despite Digital Custody holding a license from the South Dakota Division of Banking, enabling it to provide custodial services.

CoinList emerged as the preferred purchaser amid offers from three interested parties. The decision was based on their superior offer, ability to expedite the transaction, and an existing relationship with Terence J. Culver. CoinList’s association with Culver is deemed advantageous for obtaining regulatory approval for the sale, a crucial aspect in such transactions. Both the Committee and the Ad Hoc Committee of Non-US Customers of FTX.com have given their approval to the acquisition. However, FTX retains the right to consider more favorable offers for DCI until three days before the deal’s closing date, with a reverse-termination fee of $50,000 if the purchaser fails to finalize the transaction.

In connection with this move, FTX seeks approval to divest its 8% stake in AI startup Anthropic Holdings. The motion filed by FTX’s current CEO outlines two potential procedures for the sale: an auction and a private sale. The undisclosed price sought for the Anthropic shares underscores FTX’s strategic approach, aiming to maximize returns. With Anthropic Holdings reaching a reported valuation of up to $18 billion in December 2023, FTX’s 7.84% stake could hold significant value, potentially around $1.4 billion.

FTX’s actions indicate a proactive effort to generate funds and fulfill obligations to customers and creditors following the FTX collapse. The company is exploring various avenues, including the sale of its stake in Anthropic Holdings and its claim against bankrupt digital financial services firm Genesis Global Capital. These strategic actions reflect the dynamic nature of the cryptocurrency industry and the adaptability required to navigate its challenges.