Crypto Exchange FTX Gets Nod to Sell $873M of Assets to Repay Creditors

Crypto Exchange FTX Gets Nod to Sell $873M of Assets to Repay Creditors – FTX, the bankrupt cryptocurrency exchange, has received approval to liquidate approximately $873 million in trust assets. The funds generated will be directed towards compensating creditors affected by the exchange’s 2022 downfall. 

Notably, a significant portion, nearly $700 million, of the approved trust assets for sale is derived from Grayscale’s primary offering, the Grayscale Bitcoin Trust. FTX’s share of the $873 million assets comprises holdings in trusts from crypto asset manager Grayscale Investments, valued at $807 million, and custody service provider Bitwise, valued at $66 million.

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The mentioned court document cites $744 million in assets, based on a valuation as of Oct. 25, 2023. It’s worth noting that the value of these assets has since appreciated. Approximately four weeks following the filing of a motion by FTX debtors on Nov. 3, seeking approval for the sale of six cryptocurrency trusts, including the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index Fund, the approval was granted.

Presently, FTX possesses more than 22 million units of GBTC, Grayscale’s primary Bitcoin product, valued at $691 million. Additionally, its 6.3 million shares of ETHE have an approximate worth of $106 million. FTX has the option to sell three other trusts from Grayscale—Ethereum Classic Trust, Litecoin Trust, and Digital Large Cap Trust—to recover funds for customers affected by FTX’s situation.

Under the leadership of John J. Ray III, FTX’s administrators have been diligently pursuing asset recovery since the downfall of Sam Bankman-Fried’s previous empire in November 2022. A substantial portion, approximately $7 billion, has been successfully recovered, with nearly half, totaling $3.4 billion, originating from cryptocurrencies.

In June, FTX’s debtors projected that the misappropriated customer assets amounted to a total of $8.7 billion. On Nov. 2, Bankman-Fried was found guilty on seven charges related to fraud and is scheduled for sentencing on March 28, 2024. Currently held at Brooklyn’s Metropolitan Detention Center, he recently traded four mackerels for a haircut.

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