FTX Aims to Offload $744M Worth of Grayscale and Bitwise Assets: A Game-Changing Move in the Cryptocurrency Market

"FTX Crypto Exchange Seeks Court Approval to Sell $744 Million in Trust Assets, Including Grayscale and Bitwise Funds"

FTX, a bankrupt cryptocurrency exchange, and its debtors have submitted a request to the U.S. bankruptcy court in Delaware seeking approval for the sale of certain trust assets. These assets include funds from Grayscale and Bitwise, with an estimated value of $744 million. The sale will be facilitated through an investment adviser, as stated in a court filing on Friday. The purpose of the sale is to prepare for forthcoming distributions to creditors and enable FTX to quickly sell the trust assets at an opportune time. By conducting sales under the proposed Sale Procedures, the cost and delay of filing separate motions for each sale can be avoided.

FTX was once one of the largest cryptocurrency exchanges globally, but it filed for bankruptcy in November of last year following allegations of misappropriation of customer funds, as reported by CoinDesk. Last week, FTX founder Sam Bankman-Fried was found guilty by a jury of defrauding customers and lenders. A potential sentencing date of March 28, 2024, has been tentatively set, and experts suggest that Bankman-Fried could face between 15 to 20 years in jail, despite the theoretical maximum sentence of 115 years.

The trust assets in question are held in five Grayscale Trusts, which have an estimated total value of $691 million, and one trust managed by Bitwise, valued at $53 million. These trusts allow investors to gain exposure to digital assets without directly owning them. The debtors believe that proactively mitigating the risk of price fluctuations will best protect the value of the trust assets, thus maximizing returns for creditors and ensuring an equitable distribution of funds in the debtor’s plan of reorganization.

In addition to utilizing an investment adviser, the debtors have proposed the establishment of a pricing committee that includes representation from all stakeholders. The investment adviser will be required to obtain a minimum of two bids from different counterparties before proceeding with the sale of assets. It is worth noting that Grayscale and CoinDesk are both subsidiaries of Digital Currency Group (DCG).

Martin Reid

Martin Reid

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