Abu Dhabi Global Market-regulated virtual asset trading platform Hayvn is considering a formal bid for the acquisition of collapsed cryptocurrency exchange FTX’s payments business, the company said on Friday.
FTX is reportedly trying to sell or reorganise many of its businesses and FTX Pay appeals as a “bolt-on” to the Hayvn Pay infrastructure, said Christopher Flinos, co-founder and chief executive of Hayvn.
“We are pleased to learn that some of the FTX business have solvent balance sheets, responsible management and valuable franchises,” Mr Flinos said.
“We are open to a discussion with their bankers, Perella Weinberg, as soon as they have the court’s approval to proceed.”
FTX filed for bankruptcy protection in the US on November 11 in the highest-profile cryptocurrency exchange failure to date, after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal, Reuters reported.
Sam Bankman-Fried, who co-founded FTX with Gary Wang and Nishad Singh in 2019, also resigned as chief executive after discussions with his father, Professor Joseph Bankman of Stanford Law School, and his lawyers, according to the company’s 30-page bankruptcy filing.
“FTX Trading Ltd, West Realm Shires Services, Alameda Research and approximately 130 additional affiliated companies have commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the District of Delaware,” FTX said in a statement on Twitter at the time.
The company will begin “an orderly process to review and monetise assets for the benefit of all global stakeholders”, it said.
Lawyer and insolvency specialist John Ray, who oversaw Enron’s bankruptcy, has been appointed chief executive of FTX Group, the company said. Mr Bankman-Fried will remain to “assist in an orderly transition”.
“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximise recoveries for stakeholders,” Mr Ray said.
FTX Pay is an application that allows merchants to accept both cryptocurrency and fiat payments for a flat 1 per cent transaction fee with no minimum or upfront costs, according to its website.
Mr Flinos did not disclose the amount Hayvn was willing to pay for FTX’s payments business, but said its plan to bid for the company had been approved by the Hayvn board and “back-channel discussions” had begun to indicate their interest.
“It will be a public process but we want to be more ahead of the others for when that drops,” Mr Flinos told The National.
“From the advisers’ perspective, they want to know that the bidders have got money; tick, we have got money. They want to know that the bidders have got a good business; tick, we have got a good business, we are regulated, we have a game plan, we can value it [and] we know what it is worth to us.”
It is unclear in the FTX bankruptcy filing if FTX Pay is solvent as auditors are still assessing the complex set-up of the 130 affiliate companies, which have been placed into four business silos by Mr Ray.
So far, FTX and number of affiliates have a combined cash balance of $1.24 billion, the bankruptcy filing showed.
Despite this, Mr Flinos believes FTX Pay is valuable because of its relationships with established companies such as Mastercard.
“Because he [Mr Bankman-Fried] had such a strong presence as an individual and was the darling of the industry, then companies like MasterCard had arrangements with FTX Pay,” Mr Flinos said.
“I am basically not buying it for its tech, as we have got better tech. I am buying it for the relationships that it has and the presence that it has with these people, so it is less risky.”
Hayvn Pay is a regulated financial network for blockchain-based currencies and works with UAE companies such as Damac Properties, developer Nakheel and the Dubai government, allowing people to buy property using cryptocurrency, Mr Flinos said.
Earlier this week, Hayvn also unveiled a partnership with WooCommerce, an open source, e-commerce platform. The move will give it access to the company's merchants globally via a plug-in.
“Our goal is to ensure that within two years, 75 per cent of the world’s e-commerce and point-of-sale transactions have a cryptocurrency payment option available for the customer,” Mr Flinos said.
“Acquiring FTX Pay will help solidify our position as the global leader in cryptocurrency payment solutions.”