The collapsed crypto exchange and its debtors told a bankruptcy court the sale would make it easier and cheaper to repay creditors.
Former FTX CEO leaves the courthouse during his trial.
From Unchained archives
Posted November 6, 2023 at 1:43 pm EST.
Bankrupt cryptocurrency exchange FTX and its debtors want to sell about $744 million in assets currently held in two trusts to be better positioned to repay creditors, according to a filing with a U.S. bankruptcy court of Delaware on Friday.
FTX filed for bankruptcy a year ago after a CoinDesk report revealed a liquidity crisis at the exchange and sister firm Alameda Research. FTX founder and former CEO Sam Bankman-Fried was found guilty last week on all seven counts related to defrauding customers and misusing client funds.
The assets in question are in trusts managed by Grayscale and Bitwise, which provide indirect investment exposure to cryptocurrencies. FTX wants to sell $691 million from five Grayscale trusts and $53 million from one Bitwise trust.
The debtors said the sale was necessary to have the assets ready to potentially sell to multiple buyers and to repay creditors in a more efficient, cost-effective manner.
The debtors also said the sale would protect the assets from potential price swings in the trusts.
“The debtors’ judgment is that proactively mitigating the risk of price swings will best protect the value of the Trust Assets, thereby maximizing the return to creditors and promoting an equitable distribution of funds in the debtor’s’ plan of reorganization,” the filing said.
