FTX, the now bankrupt cryptocurrency exchange, is seeking court approval to sell assets worth approximately $744 million. The exchange, alongside its debtors, has petitioned the U.S. Bankruptcy Court in Delaware to authorize the sale of trust assets. The filing underscores the debtors’ strategy to capitalize on favorable market conditions to optimize the sale outcome.
The assets targeted for sale include investments in five Grayscale Trusts, collectively valued at $691 million. Additionally, a trust managed by Bitwise is on the list, with a market valuation of approximately $53 million as of October 25, 2023.
The filing further elaborated on the debtors’ rationale, emphasizing the mitigation of price volatility risks as a means to preserve and maximize the trust assets’ value. This, in turn, is aimed at ensuring a maximized return to the creditors and an equitable distribution of funds as part of the reorganization plan.
To facilitate this process, the debtors propose the formation of a pricing committee to represent all stakeholders’ interests. Moreover, they stipulate that the appointed investment adviser must secure a minimum of two competing bids before proceeding with any asset sales. The court’s decision on the approval of the proposed asset sales remains pending. The outcome is poised to significantly impact the creditor reimbursement process in the ongoing FTX bankruptcy case.
Last week, blockchain analytics firm Spot On Chain reported significant asset movements linked to FTX and Alameda Research. The firm identified transfers totaling $46 million to prominent exchanges such as Kraken, Binance, and Coinbase. Additionally, FTX and Alameda Research were reported to have deposited over $83.6 million worth of 26 EVM tokens to various exchanges within the same period.
The collapse of FTX, once a dominant player in the crypto exchange market, followed revelations of customer fund misappropriation. These revelations were brought to light by investigative reports and subsequently led to the conviction of the exchange’s founder, Sam Bankman-Fried, on charges of fraud. A jury found Bankman-Fried guilty last week, with sentencing scheduled for late March 2024. Legal experts suggest that while he faces a theoretical maximum of 115 years in prison, the actual sentence may range between 15 to 20 years.
