The Delaware bankruptcy court has authorized the sale of approximately $873 million in trust assets by the bankrupt cryptocurrency exchange FTX. This decision, detailed in a recent court filing, is a significant step in the ongoing efforts to reimburse creditors affected by the exchange’s collapse in 2022.
FTX’s assets for sale include stakes in trusts issued by Grayscale Investments and custody service provider Bitwise, valued at $807 million and $66 million, respectively. Notably, the valuation of these assets has increased since an October 25 assessment, which had them pegged at $744 million.
The market has reacted to these developments, with FTX’s token, FTT, experiencing an 8% increase in value. However, this uptick is accompanied by a 40% drop in trading volume, indicating fluctuating market risk. The token’s trading value at press time was around $4.2689, with the Relative Strength Index (RSI) remaining above 50.0, suggesting potential for further gains.
The court’s approval follows a November 3 motion by FTX debtors to Judge John Dorsey, seeking permission to sell six cryptocurrency trusts. These include the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index Fund (BITW). FTX’s holdings in these trusts are substantial, with over 22 million units in GBTC and 6.3 million shares in ETHE, valued at approximately $691 million and $106 million, respectively.
Additionally, FTX is authorized to sell its shares in Grayscale’s Ethereum Classic Trust (ETCG), Litecoin Trust (LTCN), and Digital Large Cap Trust (GDLC). These sales are part of the broader asset recovery efforts led by FTX’s administrators, including John J. Ray III, who have been working to salvage value from the defunct exchange since its collapse.
To date, around $7 billion in assets has been recovered, with cryptocurrencies accounting for nearly half of this amount ($3.4 billion). This recovery is significant, considering FTX debtors’ June estimate that approximately $8.7 billion in customer assets were misappropriated.
Meanwhile, FTX’s founder, Sam Bankman-Fried, was convicted on seven fraud-related charges on November 2 and awaits sentencing scheduled for March 28. He is currently detained at Brooklyn’s Metropolitan Detention Center.
