FTX Wants Dubai Unit Removed From U.S. Bankruptcy Proceedings

Bankrupt crypto exchange FTX wants to exclude its Dubai unit from the wind-down proceedings in the U.S., according to court filings from Thursday.

When FTX filed for bankruptcy in the U.S. last November, it started Chapter 11 cases for 102 associated entities from around the world. FTX Dubai, set up in February 2022 and owned by the company’s European arm, was one of the entities roped into the proceedings.

But FTX Dubai didn’t conduct any business prior to the bankruptcy filing in the United Arab Emirates (UAE) and therefore “has no reasonable likelihood of rehabilitating its operations,” the bankrupt estate argued in the filing requesting the dismissal of the unit.

“Additionally, FTX Dubai is balance sheet solvent. Therefore, the Debtors believe that a solvent voluntary liquidation procedure in accordance with the laws of the United Arab Emirates would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets,” the filing said.

The estate argues that any court orders while FTX Dubai was part of the proceedings should stand, but that the dismissal requested “is necessary” to protect the debtors and authorize them to, for instance, pay pre-bankruptcy wages and salaries, along with other compensation, benefits and expenses to Dubai employees.

A hearing on the matter is scheduled for Aug. 23.