FTX Consolidating Coins to Settle Debts
As part of its efforts to settle over $8 billion in debt owed to customers and creditors after declaring bankruptcy in November 2022, FTX, the defunct crypto exchange, has been consolidating coins.
In a recent update shared on X (formerly Twitter) on Sep. 6, FTX stated that it is bridging several digital assets back to their native blockchain networks.
Furthermore, FTX plans to transfer its holdings of Solana (SOL) and other virtual currencies from their reserves to BitGo.
Court Appoints BitGo as FTX’s Custodian
Following FTX’s bankruptcy filing and the resignation of CEO Sam Bankman-Fried (SBF), BitGo was appointed as the official custodian for FTX’s crypto assets in court.
The Custodial Services Agreement includes a $5 million one-time upfront fee for securing FTX’s crypto assets during the bankruptcy proceedings, as outlined in court documents.
SBF’s Legal Troubles and Bail Revocation
In December, SBF was arrested by Bahamian law enforcement and faces various criminal charges, including fraud, conspiracy, and money laundering, in the United States.
Initially, SBF pleaded not guilty to all charges and was released on a $250 million bail bond to his parent’s house in Palo Alto, California.
However, SBF’s bail was revoked by Judge Lewis Kaplan due to allegations of witness tampering, and he was subsequently moved to the Metropolitan Detention Center in Brooklyn ahead of his criminal trial in October 2023.
Hot Take
FTX’s ongoing efforts to consolidate coins and settle its debts demonstrate the challenges that can arise in the crypto industry. The appointment of BitGo as the custodian highlights the importance of trusted third-party services in securing crypto assets. SBF’s legal troubles further emphasize the need for proper corporate controls and ethical leadership within the crypto business realm. The outcome of SBF’s criminal trial will undoubtedly have significant implications for the future of both FTX and the wider crypto market.
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