Bankrupt FTX Gets Court Approval to Liquidate $873M in Trust Assets to Repay Creditors
Summary:
FTX, a bankrupt cryptocurrency exchange, has received court approval to sell approximately $873 million of trust assets to repay impacted creditors. The assets, coming from FTX's stakes in various trusts managed by crypto asset manager Grayscale Investments and custody service provider Bitwise, have appreciated over time, amounting to more than the original valuation figure. The liquidation includes Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and others, total valued at $744 million as of Oct. 25th, 2023. The FTX's administrators continue to recover assets following its collapse in 2022.
The insolvent cryptocurrency marketplace, FTX, has received approval to liquidate approximately $873 million of its trusted assets. The proceeds from the sale will be utilized to compensate creditors affected due to the downfall of the exchange in 2022, as per a document filed on Nov. 29 with a Delaware bankruptcy court. The assets up for sale, which were valued at $807 million from FTX's shares in a collection of trusts managed by Grayscale Investments and $66 million from custodial service Bitwise, amounted to $744 million as listed in the court papers, due to the valuation date being fixed as of Oct. 25, 2023. However, since the assets have appreciated over time.
Permission for the sale was granted nearly a month after FTX debt collectors appealed for such action to Judge John Dorsey on Nov. 3. The appeal was for the liquidation of six cryptocurrency trusts, involving Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index Fund (BITW).
FTX is currently in possession of over 22 million units of GBTC, Grayscale's premier Bitcoin offering, which is now valued at $691 million. Additionally, its ownership of 6.3 million ETHE shares is presently estimated to be around $106 million. Grayscale's Ethereum Classic Trust (ETCG), Litecoin Trust (LTCN), and Digital Large Cap Trust (GDLC) are the other three trusts that FTX has now been given permission to liquidate in order to retrieve funds for the affected users of FTX.
The value of FTX's Grayscale and Bitwise shares has risen from the $744 million recorded on Oct 25. The recovery of assets has been overseen by FTX's administrators, led by John J. Ray III, following the collapse of Sam Bankman-Fried's erstwhile enterprise in November 2022.
To date, assets worth $7 billion have been recovered, with close to half of it, $3.4 billion, being in the form of cryptocurrencies. In June, FTX's debtors had estimated the total sum of customer assets misappropriated at around $8.7 billion.
On another front, Bankman-Fried was found guilty of seven charges related to fraud on Nov. 2 and his sentence is anticipated to be on March 28. He is currently detained at the Metropolitan Detention Center in Brooklyn, where he recently exchanged four mackerels for a haircut.
Published At
11/30/2023 2:15:04 AM
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