FTX Requests Bankruptcy Court Approval to Sell Trust Assets Worth $744 Million
Crypto exchange FTX, which is currently bankrupt, has filed a request with the bankruptcy court in Delaware to sell key trust funds worth approximately $744 million. These assets include holdings from Grayscale, a crypto asset manager, and Bitwise, a custody service provider.
The purpose of selling these trust assets is to prepare for forthcoming distributions to creditors. The assets consist of one Bitwise trust valued at $53 million and five Grayscale trusts valued at $691 million. These trusts serve as an entry point for investors to gain exposure to cryptocurrencies without directly owning them.
The court filing states that proactively mitigating the risk of price fluctuations will protect the value of the trust assets, ensuring maximum returns for creditors and promoting fair distribution of funds during the reorganization process.
Sale Procedures and Stakeholder Involvement
FTX debtors have requested that an investment adviser approves the sale of trust assets and oversees the sale procedures. Additionally, they propose the formation of a pricing committee consisting of stakeholders to participate in the sale process.
This recent request follows a previous court approval for FTX to liquidate nearly $3.4 billion worth of crypto assets in batches of $50 million and $100 million. This method was implemented to prevent any adverse market impact resulting from a large-scale dump of assets.
FTX Bankruptcy Proceedings and Former CEO’s Trial
The bankruptcy proceedings for FTX are progressing while its former CEO, Sam Bankman-Fried, faces legal consequences. Recently, Bankman-Fried was found guilty on all seven counts during his criminal trial in New York. The charges include wire fraud, securities fraud, commodities fraud conspiracy, and money laundering conspiracy.
The judge is scheduled to order the sentencing in the case on March 28, 2024.
Hot Take: FTX Seeks Approval to Sell Trust Assets Worth $744 Million
Bankrupt crypto exchange FTX has requested permission from the bankruptcy court in Delaware to sell trust assets valued at $744 million. The sale of these assets, including holdings from Grayscale and Bitwise, aims to facilitate forthcoming distributions to creditors. FTX debtors argue that proactively mitigating price risks will protect asset value and maximize returns for creditors. They propose involving an investment adviser and establishing a pricing committee represented by stakeholders in the sale procedures. This request follows a court-approved liquidation of $3.4 billion in crypto assets. Meanwhile, FTX’s former CEO, Sam Bankman-Fried, awaits sentencing after being found guilty on multiple counts in his criminal trial.
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