Bankrupt cryptocurrency exchange FTX has submitted a request to the Delaware Bankruptcy Court, seeking permission to sell specific trust fund assets valued at approximately $744 million. These assets include holdings from crypto asset manager Grayscale Investments and custody provider Bitwise. FTX's primary objective in selling these assets is to prepare for "imminent dollarized distributions to creditors," as outlined in their court filing on November 3.
Among the assets earmarked for sale, there is one Bitwise trust valued at $53 million and five Grayscale trusts collectively worth $691 million. These trusts function as a means for investors to access exposure to cryptocurrencies without direct ownership of the underlying assets. FTX's rationale for the sale is to proactively mitigate the risk of price fluctuations, ultimately safeguarding the value of these trust assets, maximizing returns for creditors, and facilitating an equitable distribution of funds as part of the debtors' reorganization plan.
In addition to requesting approval for the sale and sale of the trust assets, FTX's debtors propose the establishment of a pricing committee with representation from stakeholders to oversee the sales process. This move follows a prior court approval for the liquidation of nearly $3.4 billion in crypto assets, with the assets set to be sold in tranches of $50 million and $100 million to prevent any adverse market effects resulting from large-scale selling. FTX's bankruptcy proceedings were initiated after the conviction of its former CEO, Sam Bankman-Fried, on seven counts in a New York criminal trial. These counts include wire fraud, conspiracy to commit wire fraud, securities fraud, commodities fraud conspiracy, and conspiracy to commit money laundering. The case is set for a ruling on March 28, 2024.
