In a significant move, the bankrupt cryptocurrency exchange FTX has filed a motion to sell its stake in the artificial intelligence (AI) startup Anthropic.
FTX’s 7.84% stake is valued at approximately $1.4 billion and represents a significant portion of its remaining assets.
The decision marks a pivotal step in the exchange’s strategy to liquidate assets and gather funds to repay its customers and creditors following its collapse in November 2022.
Anthropic is an American AI company founded by ex-OpenAI members and is currently valued at $18 billion. It represents FTX’s most substantial illiquid asset.
The investment in Anthropic was made by FTX’s former CEO Sam Bankman-Fried in October 2021. The same amounted to $500 million.
Expedited sale process underway
Under the guidance of its new CEO, John Ray III, FTX is pushing for court approval to expedite the sale of its Anthropic stake.
The exchange has proposed two methods for the sale: an auction or a private sale, aiming to maximise the returns from this crucial asset.
With Anthropic’s standing in the AI industry and its substantial valuation, the sale is deemed critical for FTX’s recovery plan.
FTX has also pleaded the court for a shortened objection period to hasten the sale. It requested for its Anthropic stake sale hearing to happen on 22 February, after an objections hearing due by 15 February.
The representatives of the now-defunct exchange reportedly redacted the price they are seeking for the Anthropic shares, saying:
“The public disclosure of the Reference Price could be detrimental to the Debtors’ goal of obtaining higher and better offers for the Anthropic Shares.”
Broader liquidation efforts and criticism
This move is part of FTX’s broader efforts to liquidate assets and fulfil its financial obligations following its operational collapse.
The decision to sell the Anthropic stake comes after FTX’s recent divestments, including over $700 million in cryptocurrencies and significant portions of its investments in GBTC and a claim against the bankrupt crypto lender Genesis.
Despite previous considerations to sell its Anthropic shares, FTX had halted these plans in June 2023 for undisclosed reasons. It is now resuming its asset liquidation strategy to address customer and creditor claims.
The discussion around FTX’s reorganisation has been met with scepticism, notably from former SEC official John Reed Stark. He labelled the reorganisation plan as impractical and criticised the bankruptcy team for profiting from the situation.
Stark’s comments highlight the challenges FTX faces in its liquidation and repayment efforts, underscoring the complexities of navigating bankruptcy and asset liquidation in the volatile cryptocurrency market.
According to him, the reorganisation costs too much and said that he predicted more than a year ago that FTX, Chapter 11 Bankruptcy, is impossible.
As per FTX’s legal representative, Andy Dietderich, the exchange has scratched plans to relaunch and resurrect the exchange. The primary focus is now on full customer reimbursement, given foundational issues that impeded securing adequate funding from potential bidders.