Bitvo abandons FTX purchase

Zach Anderson  Nov 17, 2022 00:00  UTC 16:00

4 Min Read

The Canadian cryptocurrency exchange Bitvo has terminated the proposed acquisition transaction it had with the FTX in order to preserve its standing as an autonomous company.


Pateno Payments, which is an investor in Bitvo, has cancelled the purchase transaction it had been discussing with FTX Canada and FTX Trading in accordance with the terms of the agreement. Pateno Payments is a stakeholder in Bitvo. This information was disclosed by Bitvo on November 15th.


The business has made it abundantly obvious that its operations have not been hampered in any way, noting the fact that Bitvo does not have any substantial exposure to FTX or any of the associated organisations of that corporation as supporting evidence. Normal operations are being carried out across the board for all areas of trading on Bitvo, including deposits and withdrawals.


In addition, Bitvo emphasised that it is not a party to the bankruptcy processes that FTX and its linked enterprises have launched. Bitvo noted that FTX and its connected firms have initiated these procedures. According to the press release, Bitvo has never owned, listed, or traded the FTX Token (FTT) or "any related token."


According to the company, "Bitvo has functioned as an independent, Canadian crypto asset trading platform ever since the company's establishment." The corporation continued by stating that the website has not been operating as a lending or borrowing service for some time:


Because Bitvo maintains a healthy reserve at all times, the business does not provide credit to its clientele in the form of loans. This is how Bitvo has conducted business from the very beginning, and it is a necessity of Bitvo's regulatory status as a Restricted Dealer registered with the Canadian Securities Administrators. Bitvo has always functioned in this manner. Bitvo has always made the decision to run its business in this fashion.

A previous article published by Cointelegraph said that the financially troubled cryptocurrency exchange FTX has entered into a deal to purchase Bitvo in June 2022. This was done as part of the company's plans to expand its operations in Canada. However, things did not go according to plan when FTX became involved in a major crisis in the financial sector. This occurred after it was discovered that the exchange had improperly used the money of its customers to engage in trading on its sister company, Alameda. This caused FTX to become embroiled in the crisis.


Bitvo released an official declaration on November 14 noting that the acquisition of the firm by FTX was still a pending agreement that had not yet been finalised and that the transaction was not yet complete. As stated in the announcement issued by the company, "Digital assets are stored with independent third parties BitGo Inc. and BitGo Trust Company," and more than eighty percent of the assets are held in cold storage.


Pamela Draper, the CEO of Bitvo, said to Cointelegraph that the firm is happy that the merger did not proceed because "it would have been terrible to our workforce and just as critically, our users." She went on to clarify that the process that took place between the announcement of the agreement in June and its conclusion needed working to fulfil the closing conditions, and that this was something that took place between the months of July and September. The regulatory permission was the element that was considered to be the most significant.


According to Draper, "The Alberta Securities Commission is our main regulator, and Bitvo and FTX were working with them to gain the appropriate permissions." FTX and Bitvo were working with them to obtain the requisite approvals. The Alberta Securities Commission is the primary regulating body for our industry.


Even though it seems like Bitvo was able to back out of the agreement, there are a few crypto firms that have been harmed by the FTX problem as a consequence of being bought by the crypto billionaire. These companies include Bitvo.


The cryptocurrency exchange Liquid, which is owned by FTX and made public on November 15, according to an official statement that was made public that day, has suspended its fiat and cryptocurrency withdrawals on its Liquid Global platform in connection with FTX's issues. FTX's problems were made public on November 15. FTX successfully finalised the purchase of the Japanese exchange as well as the firms that were linked with it in February of 2022.


Following the filing of Chapter 11 by FTX and FTX US, the insolvent cryptocurrency lender Voyager Digital took to Twitter on November 16 to provide its customers with an update on the reorganisation efforts. In the tweet, Voyager Digital informed its customers that the customer vote will be cancelled and that the proposed sale will not move forward. The bankruptcy petition for Voyager was filed in July 2022, and FTX US purchased its assets in September of the same year.


FTX US Derivatives, a subsidiary of FTX US that was formerly known as LedgerX, has continued to provide fully-collateralized swaps, futures, and options on cryptocurrency, according to comments made by CEO Zach Dexter on November 14. FTX US Derivatives is a company that was formerly known as LedgerX. During the course of this conversation, he also brought up the fact that LedgerX was omitted from the bankruptcy file that was submitted by FTX. Dexter emphasised in yet another tweet that was sent out on Monday that "client money are secure on the LedgerX LLC derivatives platform, which remains open 24 hours a day, seven days a week." As was previously reported, FTX US completed the acquisition of LedgerX in the month of August 2021 in a deal that was kept discreet.

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