FTX hires Galaxy to handle its cryptocurrency holdings
FTX, the defunct crypto exchange, has enlisted the services of Galaxy, a crypto firm, to manage its cryptocurrency holdings. Galaxy, led by crypto billionaire Mike Novogratz, will provide advisory services to FTX to minimize its exposure to adverse price movements. FTX intends to reimburse creditors in traditional fiat currency instead of Bitcoin or Ethereum, but it also aims to prevent significant devaluation of its crypto assets, valued at over $3 billion. The strategy includes hedging Bitcoin and Ether to limit downside risk and staking certain digital assets for low-risk returns. FTX seeks guidance from market experts, who may suggest implementing weekly sales limits to mitigate risk.
FTX proposes a relaunch for offshore customers
FTX’s new management has proposed a relaunch of the exchange exclusively for offshore customers. They plan to group creditors into different classes to ensure they receive their entitled claims. The efforts to revive FTX have gained momentum, with the recovery of over $7.3 billion in cash and liquid crypto assets. Venture firm Tribe Capital has shown interest in leading a $250 million fundraising campaign for the new platform. In contrast to other bankrupt crypto firms, FTX aims to distribute traditional fiat currency instead of liquid cryptocurrencies like BTC and ETH.
BlockFi accuses FTX and Three Arrows Capital
Bankrupt crypto lender BlockFi has accused FTX and Three Arrows Capital of victimizing the company and claims that they are not entitled to the $5 billion they are seeking to recover. FTX is seeking the recovery of $90 million in withdrawals made by BlockFi from FTX.com and $400 million in loan repayments made by its trading firm, Alameda Research, among other preferential payments.
Hot Take:
FTX’s hiring of Galaxy to manage its cryptocurrency holdings shows its commitment to minimizing risk and protecting its assets. The proposed relaunch for offshore customers demonstrates FTX’s determination to recover and provide value to its creditors. However, the accusations from BlockFi create uncertainty and may impact FTX’s recovery efforts. It remains to be seen how these legal battles will unfold and their implications for the future of FTX.
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