FTX Seeks Court Permission to Sell $744M in Trust Assets Amid Bankruptcy Proceedings
Summary:
FTX, a crypto exchange in bankruptcy, has sought permission from a Delaware bankruptcy court to sell off trust assets valued at around $744 million, including those from crypto asset manager Grayscale and custody service Bitwise. This move may allow for upcoming distributions to creditors. The sale requires advisory approval and a stakeholders' pricing committee as part of the procedure. The request follows a prior court decision permitting the company to liquidate almost $3.4 billion in crypto assets. The proceedings continue as the former CEO, Sam Bankman-Fried, awaits sentencing for multiple fraud charges.
FTX, a crypto exchange currently undergoing bankruptcy, has submitted a plea to a Delaware bankruptcy court, requesting permission to vend off certain primary trust funds, including assets from crypto asset manager Grayscale and custody service provider Bitwise totaling approximately $744 million. In a court document submitted on November 3, FTX has requested the court to allow the sale of the trust assets as this could pave the way for the company to arrange for upcoming distributions for creditors in U.S. currency. The trust assets in question are currently held in one Bitwise trust worth $53 million and five Grayscale trusts worth $691 million. Crypto investors often use these crypto trusts as an easy gateway to the crypto market without the need for direct crypto ownership. Grayscale and Bitwise Trust Assets are detailed in the court document.
The document states: "The debtors' belief is that proactively preventing the risk of price fluctuations will best safeguard the trust assets' value, thus optimizing creditors' return and advocating for a fair distribution of funds in the debtor's restructuring plan."
FTX debtors have asked for the approval of an investment adviser for the trust assets' sale and sale processes. They have also recommended a pricing committee consisting of stakeholders to participate in the sales process.
FTX's latest plea to sell trust assets follows a prior court decision that granted them permission to liquidate nearly $3.4 billion in crypto assets. The court instructed the sale of these assets in quantities of $50 million and $100 million to preclude any potential market collapse. The bankruptcy proceedings of FTX are ongoing as the ex-CEO of FTX, Sam Bankman-Fried, was found guilty on all seven charges against him during his criminal trial in New York. These charges include two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy, and one count of money laundering conspiracy. His sentencing order is scheduled for March 28, 2024.
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Published At
11/6/2023 8:43:38 AM
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