FTX approved to sell assets worth $873m for creditor repayment
Bankrupt cryptocurrency exchange FTX has been given the green light to sell around 32 million shares held in various digital asset trusts as part of its efforts to recover funds.
According to a Nov. 29 filing in a Delaware bankruptcy court, crypto exchange FTX has received approval to sell approximately $873 million of trust assets, with the proceeds earmarked for repaying creditors affected by the exchange’s downfall in 2022.
“The debtors are authorized, but not directed, to execute sales of the trust assets, in their reasonable business judgment, in accordance with the following sale procedures,” the filing said.
Galaxy, a prominent crypto investment firm, has seen its role expanded in assisting FTX with the asset sales, as per the latest court filings. Earlier this year, FTX had appointed Galaxy to manage its extensive digital asset holdings, a decision that now seems pivotal in the ongoing recovery process.
The assets earmarked for sale include FTX’s stakes in trusts issued by Grayscale Investments and custody service provider Bitwise. The Grayscale stakes are currently valued at $807 million, while the Bitwise assets stand at $66 million.
Notably, the total asset value was listed as $744 million in the court document, a figure based on the valuation as of Oct. 25, 2023. The increase to $873 million reflects the recent surge in the value of cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
The approval comes almost a month after FTX debtors submitted a request to Judge John Dorsey on Nov. 3, seeking permission to sell six cryptocurrency trusts, including the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index Fund (BITW).
FTX currently owns over 22 million units of the Grayscale Bitcoin Trust (GBTC), now valued at $691 million, and 6.3 million shares of the Grayscale Ethereum Trust (ETHE), currently worth approximately $106 million. Additionally, FTX is authorized to sell its stakes in Grayscale’s Ethereum Classic Trust (ETCG), Litecoin Trust (LTCN), and Digital Large Cap Trust (GDLC).
Since the collapse of Sam Bankman-Fried’s former empire in Nov. 2022, FTX’s administrators, under the leadership of John J. Ray III, have been diligently working to recover assets.
Since the collapse of Sam Bankman-Fried’s crypto empire in Nov. 2022, FTX’s administrators, led by John J. Ray III, have been diligently working to recover assets. To date, around $7 billion has been reclaimed, with almost half in the form of cryptocurrencies ($3.4 billion).
In June, FTX’s debtors estimated the total amount of customer assets misappropriated was $8.7 billion.
Meanwhile, Bankman-Fried was convicted on seven fraud-related charges on Nov. 2 and is awaiting sentencing, which is scheduled for March 28. He is currently detained at Brooklyn’s Metropolitan Detention Center, where he recently reportedly exchanged four mackerels for a haircut, highlighting the stark contrast to his previous lavish lifestyle.
