A group of FTX customers has filed a limited objection to FTX’s plan to sell four independently operated subsidiaries, arguing that they should be privy to the sales process to ensure thcustomer interests are represented. 

The group has also shared concerns that “misappropriated customer funds” may have been used to acquire or keep these firms running.

The limited objection was filed on Dec. 4 by an ad hoc committee of non-U.S. customers, which comprises 18 members who collectively have claims against FTX in excess of $1.9 billion.

In its filing, the committee argued that previous public statements by FTX, the Securities and Exchange Commission and the Commodity Futures Trading Commission make clear that the customer assets on the platform belong to customers and not FTX.

It said there were “significant concerns over the lack of information regarding sale of the businesses,” and also questioned whether the businesses may be “necessary to a potential restart” of FTX.

A limited objection is similar to an objection except it only applies to a specific part of the proceedings. In this instance, the limited objection is due to the exclusion of the ad hoc committee from the sale process.

Ad Hoc Committee is the first I’ve seen mention a potential FTX restart to the court – one of the reasons they list for filing they limited objection to FTX’s planned sales of solvent subunits. pic.twitter.com/7TCW3WwRm0

— FTX Creditor (@AFTXcreditor) January 5, 2023

The committee has asked the judge to allow them to serve as “consulting professionals” so that they can ensure customers’ interests are represented throughout the bidding process, adding:

“The Ad Hoc Committee does not seek to stand in the way of value-maximizing transactions that the Debtors may pursue, so long as the interests of FTX.com customers are protected.”

Under the proposed bid procedures, only consulting professionals will be able to attend the auction and consult with FTX on matters relating to the sale process, and the committee notes that the consultation parties have no control of the process outside of being able to provide counsel.

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On Dec. 15, FTX had asked the bankruptcy court to allow them to sell off its European and Japanese branches, in addition to derivatives exchange LedgerX and stock-clearing platform Embed.

LedgerX in particular has been hailed as a success story during the bankruptcy proceedings, with Commodity Futures Trading Commission Chairman Rostin Behnam noting that the firm had essentially been “walled off” from other companies within FTX Group, and “held more cash than all the other FTX debtor entities combined.”

Last week, the same committee asked for customers’ names and private information to be redacted from court documents, suggesting that customers could be exposed to identify theft, targeted attack and “other injury.”