FTX Warns of Unauthorized Bidding Amid Bankruptcy, Former CEO Faces 110-Year Sentence
Summary:
As bankrupt FTX Derivatives Exchange makes efforts to reconcile debts with creditors following its 2022 collapse, it warns the public about Galaxy Asset Management being its only approved investment manager for the court-ordered sale of digital assets. The exchange is also combating unauthorized bidding by third parties. FTX, which has so far recovered $7 billion for customer repayments, gained approval to sell its $1 billion stake in AI firm Anthropic. Former CEO Bankman-Fried's pending sentencing could lead to 110 years in prison.
As FTX Derivatives Exchange navigates bankruptcy, readying to meet obligations to its creditors following its 2022 demise, it has issued a warning about its only sanctioned investment manager. Using the social media platform X, FTX has advised that the authorized entity for managing the court-ordered sale of Digital Assets by FTX Debtors is Galaxy Asset Management. Therefore, only Galaxy Asset Management's offers are valid for buy and sell proposals.
FTX's public statement aims to inform all parties of interest, particularly law-abiding institutional buyers. The announcement draws attention to unverified third parties attempting unauthorized bidding on behalf of FTX Debtors. A snapshot of FTX's alert from X social media platform confirms this.
Moreover, FTX clarified that in circumstances where the FTX Debtors offload locked digital assets, the established terms and conditions for unlocking those assets will remain in effect. The beleaguered exchange has been meticulously working towards restructuring and reimbursing its creditors. Till now, FTX has retrieved assets worth $7 billion, earmarked for reimbursement.
In a hearing held on Feb 22, the Supreme Bankruptcy Court of the United States District Court for the District of Delaware gave FTX the green light to unload its stake, exceeding $1 billion, in AI company Anthropic.
Following FTX's motion to sell its 7.84% share of Anthropic, this decision was made. FTX initially invested around $530 million in the AI venture in April 2022, just a few months before the exchange went under and filed for Chapter 11 bankruptcy in November of that year.
In December 2023, FTX debtors suggested claimants receive repayments based on the cost of cryptocurrency assets at the point of bankruptcy: $16,871 for Bitcoin BTC and $1,258 for Ether ETH. Yet, FTX creditors pushed for repayments “in kind” for cryptocurrency possessions. Judge John Dorsey sided with debtors, declaring on Jan. 31 that the law was “unambiguously clear” on this issue.
On November 3, 2023, Ex-CEO Bankman-Fried was found guilty of seven charges in his criminal proceeding. These charges included conspiracy to commit wire fraud, securities fraud, conspiracy to commit commodities fraud, and conspiracy to launder money. He awaits sentencing on March 28, with a potential 110 years behind bars.
Published At
3/2/2024 2:13:15 PM
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