Bankrupt FTX Files to Sell $744M Worth of Trust Assets Owned by Grayscale and Bitwise
Bankrupt cryptocurrency exchange FTX has submitted a filing in Delaware bankruptcy court seeking permission to sell certain trust assets valued at around $744 million that belong to Grayscale and Bitwise. The move aims to facilitate payments to creditors in US dollars and expedite the sale of trust assets at a lower price. The court filing highlights that selling the assets to one or more buyers will reduce costs and delays associated with separate solicitations for each proposed sale.
Lawsuit Against Grayscale Investments
In March, FTX and Alameda Research, affiliated debtors, filed a lawsuit against Grayscale Investments, demanding the release of funds for shareholders of the Grayscale Bitcoin and Ethereum Trusts. The plaintiffs argue that Grayscale earned over $1.3 billion in stock management fees in the past two years while the securities are currently trading at a significant discount relative to their net asset value.
FTX Founder’s Legal Troubles
FTX founder Sam Bankman-Fried (SBF) was recently found guilty of all seven criminal charges brought against him. The final verdict, which could carry a maximum penalty of 5 to 20 years in prison per count, will be delivered by Judge Lewis Kaplan on March 28, 2024. Bankman-Fried faces up to 115 years in prison collectively, and his sentencing is scheduled for the same date.
Hot Take: FTX Seeks Sale of Trust Assets Amidst Legal Battles
Bankrupt exchange FTX’s move to sell trust assets worth $744 million owned by Grayscale and Bitwise comes as it aims to meet its obligations to creditors efficiently. Additionally, this initiative may help alleviate costs and delays associated with individual sales motions. The ongoing lawsuit against Grayscale Investments highlights the demand for the release of funds for shareholders of Grayscale Bitcoin and Ethereum Trusts, emphasizing the significant discount at which these securities currently trade. Furthermore, FTX founder Sam Bankman-Fried’s recent guilty verdict in his criminal trial adds to the legal challenges faced by the exchange. These developments underscore the complex landscape surrounding FTX as it navigates bankruptcy proceedings and legal battles simultaneously.
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