FTX reaffirms Galaxy Asset Management as exclusive intermediary amid bankruptcy chaos

Defunct crypto exchange FTX confirmed that Galaxy Asset Management is an authorized intermediary to streamline asset sales amid bankruptcy proceedings. 

In its inaugural monthly communication with the community, the company conveyed via X that any sale of digital assets by FTX debtors, as directed by the bankruptcy court, falls under the exclusive jurisdiction of Galaxy Asset Management, the court-appointed investment manager.

In the post, the exchange cautioned that numerous unauthorized third parties have emerged despite the clear directives, attempting to solicit bids from potential buyers on behalf of debtors. It poses a significant challenge, potentially muddying the waters of an already complex situation.

FTX emphasized that any offers to sell or solicitations to buy will strictly adhere to the confines of the law. According to the post, interested parties must be institutional buyers or compliant with applicable regulations.

The exchange reminded the public that the terms and conditions governing the unlocking schedule of locked digital assets remain unchanged. This assurance provides a semblance of stability amidst the legal turmoil.

FTX asset recovery on track

This decision follows FTX’s previous plea to the court to appoint Galaxy as its advisor, citing the asset manager’s extensive expertise in the field of crypto management. 

The crypto exchange’s unexpected downfall in November 2022, coupled with the subsequent arrest and trial of its founder, Sam Bankman-Fried, has propelled it to seek innovative solutions for customer fund reimbursement. 

In September 2023, the U.S. Bankruptcy Court approved FTX’s partnership with Galaxy to monetize its crypto portfolio, paving the way for subsequent liquidations, including shares in Grayscale and Bitwise worth $873 million.

Despite facing challenges, the company has made strides in recovering assets, with $7 billion reportedly earmarked to repay former customers.

Furthermore, the exchange recently secured approval from the U.S. Bankruptcy Court for the District of Delaware to sell its stake in Anthropic, an artificial intelligence firm, valued at over $1 billion. 

This approval came after a motion to liquidate a 7.84% Anthropic stake, initially invested in April 2022.

FTX debtors advocated for repayments based on the prices of crypto assets at the time of bankruptcy. However, the court sided with the debtors, rejecting creditors’ “in-kind” repayment proposals and emphasizing legal clarity on the matter.