FTX Granted Permission to Sell Assets to Settle Debts
Date: 2023-12-03 Author: Dima Zakharov Categories: BUSINESS
Approval for Asset Sale
FTX, amidst its bankruptcy proceedings in Delaware, has been granted the green light to liquidate trust assets worth approximately $873 million. This move aims to settle outstanding debts owed to creditors, victims of the exchange's crash in 2022.
Asset Details
The assets to be sold include FTX's shares in various trusts managed by cryptocurrency asset manager Grayscale Investments, totaling $807 million, along with custody service provider Bitwise's holdings valued at $66 million.
Increase in Asset Value
Court documents cite assets valued at a total of $744 million, as of October 25, 2023, indicating a subsequent increase in asset value since then.
Approval Timeline
Nearly four weeks after FTX debtors filed a motion on November 3, seeking permission to sell six cryptocurrency trusts including Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index, the approval was granted.
Current Holdings
FTX presently owns over 22 million GBTC units worth $691 million and around 6.3 million ETHE shares valued at approximately $106 million.
Trusts for Liquidation
Apart from GBTC and ETHE, FTX can now liquidate Ethereum Classic Trust (ETCG), Litecoin Trust (LTCN), and Digital Large Cap Trust (GDLC) to compensate affected FTX clients.
Restoration Efforts
Under the leadership of John Jay Reiem III, FTX administrators have been actively working on asset recovery since the collapse of Sam Bankman-Fried's former empire in November 2022.
Asset Returns
To date, FTX has already returned $7 billion in assets, with nearly half of this amount attributed to cryptocurrencies, totaling $3.4 billion. In June, the exchange's debtors estimated a total of $8.7 billion in unlawfully appropriated client assets.
Future Plans
FTX is currently in talks regarding a potential relaunch scheduled for December of this year.
Legal Proceedings
Meanwhile, Sam Bankman-Fried was found guilty on November 2, with his sentencing set for March 28. Presently, he remains in detention in Brooklyn.
