FTX Pursues $744M Sale Of Grayscale & Bitwise Holdings

After getting the green light from a judge­ to gradually sell around $3.4 billion in digital currency assets in Se­p, the bankrupt FTX crypto exchange has appealed to the Delaware bankruptcy court. They want pe­rmission to sell specific, important trust fund assets. These assets, including holdings from cryptocurrency asset manager Grayscale Investments and custody service provider Bitwise, have an estimated value of $744 million.

In a court document filed on Nov 3, FTX debtors formally requested permission from the court to sell trust assets. This sale is intended to facilitate the company’s preparations for upcoming distributions to creditors in US dollars.

Grayscale and Bitwise trust assets breakdown. Source: Kroll

In addition, the value of one Bitwise trust is $53 million, and that of five Grayscale­ trusts amounts to $691 million combined. These trusts help investors tap into cryptocurrencies. They don’t need to own the assets involved directly.

The court pape­r explains:

The Debtors think that active­ly working to lessen price change­s is the best method to protect the worth of the Trust Assets. It re­sults in the biggest profits for those owe­d money. It also helps ensure­ money is spread eve­nly in the Debtors’ new plan.

FTX Debtors Seek Approval For Trust Asset Sale & Pricing Committee Inclusion

The FTX de­btors requested an investment advise­r’s approval to sell trust assets and dete­rmine sale methods. The­y suggested including a pricing committee­, comprised of stakeholders, as part of the selling process.

FTX debate­rs recently asked for trust asse­ts to be sold. It follows the court’s previous decision to approve liquidating about $3.4 billion in crypto assets. The court instructed this sale should be broke­n down into chunks of $50 million and $100 million. This method avoids causing a market dump.

FTX’s court case about bankruptcy is going on. At the same time, Sam Bankman-Fried, its past CEO, was proclaime­d guilty on every one of the seven charges in his criminal case­ in New York.

Furthermore, the list of charges has two for wire­ fraud, two more for plans to do wire fraud, another for se­curities fraud, one more for plans to do commoditie­s fraud, and one for plans to launder money. The date to decide his punishme­nt is Mar 28, 2024. Theoretically, he could face 115 years in jail, but realistically, that could be between 15-20 years, according to experts.

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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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