FTX Files New Request to Recover Assets and Funds
Bankrupt cryptocurrency exchange FTX, led by CEO John Ray III, has submitted a new request to the US bankruptcy court of Delaware in order to recover assets and funds. The filing seeks approval for the sale of trust assets held by digital asset manager Grayscale and crypto index fund manager Bitwise, which are estimated to be worth around $744 million.
Monetizing Trust Assets to Maximize Returns
The purpose of monetizing the trust assets is to mitigate the risk of price swings and safeguard their value. This will ensure maximal returns to creditors and enable an equitable distribution of funds during FTX’s reorganization plan. The proposed sales procedures aim to reduce exposure to market volatility and prepare for potential dollarized distributions to creditors. FTX plans to engage a registered investment adviser who will work according to tailored guidelines in facilitating the monetization process.
Significant Investments in Grayscale and Bitwise Trust
FTX holds units in five Grayscale Trusts and one statutory trust managed by Bitwise. These trust assets are held in brokerage accounts at ED&F Man Capital Markets, Inc. and Deltec Bank and Trust Limited. The filing mentions ongoing legal matters involving Grayscale Investments, including their listing application for a Bitcoin exchange-traded fund (ETF) that was denied by the SEC but later vacated by the US Court of Appeals. Additionally, Alameda Research has initiated litigation against Grayscale Investments, alleging violations of trust agreements.
A Strategic Move in Bankruptcy Proceedings
The request to sell Grayscale and Bitwise trust assets valued at $744 million is a strategic move by FTX in the ongoing bankruptcy proceedings. By monetizing these assets, FTX aims to protect against market volatility, maximize returns to creditors, and ensure an equitable distribution of funds. The court’s approval will enable FTX to proceed with the sale and recover assets to support the reorganization plan.
Hot Take: FTX Takes Steps to Recover Assets and Maximize Returns
FTX’s filing of a new request with the US bankruptcy court of Delaware demonstrates their commitment to recovering assets and maximizing returns for creditors. By seeking approval for the sale of trust assets held by Grayscale and Bitwise, FTX aims to protect against market volatility and ensure an equitable distribution of funds during the reorganization plan. This strategic move reflects FTX’s dedication to navigating the bankruptcy proceedings successfully and optimizing outcomes for all stakeholders involved.
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