FTX moves to dismiss Dubai debtor’s Chapter 11 bankruptcy case

By Sarah Lizee

Olympia, Wash., Aug. 3 – FTX Trading Ltd. has asked the U.S. Bankruptcy Court for the Southern District of New York to dismiss the Chapter 11 case of FTX Exchange FZE (FTX Dubai), according to a motion filed Wednesday.

The debtor, a direct, wholly owned subsidiary of debtor FTX Europe AG, was established on Feb. 11, 2022 under the laws of the United Arab Emirates to operate a crypto exchange.

On July 12, 2022, FTX Dubai was granted a virtual asset service provider license from Dubai’s Virtual Assets Regulatory Authority (Vara). However, FTX Dubai didn’t offer any crypto-related services to investors in the United Arab Emirates or operate a crypto exchange prior to the petition date.

On Nov. 10, 2022, Vara suspended the license, and on July 12, the license expired.

FTX said that given the absence of any historical business or resources to commence any business in the future, FTX Dubai has no reasonable likelihood of rehabilitating its operations.

Also, FTX said the Dubai debtor is balance sheet solvent.

FTX said a solvent voluntary liquidation procedure in the UAE would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets.

FTX said that if any creditors filed claims against FTX Dubai in the Chapter 11 cases, the dismissal won’t impact those claims and will not prejudice any creditor’s ability to pursue those claims directly against FTX Dubai in its local liquidation proceeding.

FTX has headquarters in the Bahamas and filed Chapter 11 bankruptcy on Nov. 11, 2022 under case number 22-11068.

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