Bankrupt Crypto Exchange FTX Seeks Court Approval to Sell $744 Million in Trust Assets
Crypto News – FTX, a bankrupt cryptocurrency exchange, has filed a request with the Delaware bankruptcy court seeking approval for the sale of select trust fund assets valued at approximately $744 million. These assets include holdings from cryptocurrency asset manager Grayscale Investments and custody service provider Bitwise.
The request, dated November 3, is aimed at allowing FTX to sell these trust assets in preparation for forthcoming distributions to creditors. The assets are held within one Bitwise trust, valued at $53 million, and five Grayscale trusts, with a total value of $691 million. These trusts serve as instruments for investors to gain exposure to cryptocurrencies without direct ownership.
The court filing emphasized the debtor’s rationale, stating that proactively managing the risk of price fluctuations would safeguard the value of the Trust Assets, ultimately maximizing returns to creditors and ensuring a fair distribution of funds in the debtors’ reorganization plan.
To proceed with the sale of trust assets and establish sale procedures, FTX debtors have proposed the involvement of an investment adviser and the formation of a pricing committee representing stakeholders.
This latest request for the sale of trust assets follows a previous court-approved liquidation of nearly $3.4 billion in cryptocurrency assets. To prevent adverse market effects, the court ordered the gradual sale of these assets in batches of $50 million and $100 million.
Meanwhile, the FTX bankruptcy proceedings are ongoing, coinciding with the conviction of its former CEO, Sam Bankman-Fried, on all seven counts in his criminal trial in New York. Bankman-Fried was found guilty of wire fraud, wire fraud conspiracy, securities fraud, commodities fraud conspiracy, and money laundering conspiracy. The judge is scheduled to announce the sentencing in this case on March 28, 2024.
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