FTX gets green light to sell US$3.4 billion in crypto assets
A US bankruptcy court in Delaware approved failed cryptocurrency exchange FTX’s request to sell its crypto assets in a court hearing on Wednesday. The company, led by restructuring expert John J. Ray III, wants to repay its creditors while also considering a possible overhaul of its trading platform.
See related article: Why FTX deserves a second chance
Brief information
- Delaware Bankruptcy Court Judge John Dorsey allowed the insolvent exchange to liquidate up to $100 million worth of cryptocurrencies per week, according to court documents. The limit may be increased to $200 million upon approval by two committees representing FTX customers.
- FTX also plans to hedge and secure its cryptocurrencies through an investment advisor. According to the approved proposal, the company expects that these methods will mitigate price volatility risk and generate passive interest.
- The company has nominated Galaxy Asset Management – a digital assets firm led by former investment banker Mike Novogratz – as an advisor for the process.
- According to court documents, the bankrupt crypto exchange owns $3.4 billion worth of crypto assets. It holds around $1.16 billion in Solana, $560 million in Bitcoin and $192 million in Ether. Other crypto holdings include the stablecoins USDT and XRP.
- FTX and sister hedge fund Alameda Research filed for Chapter 11 bankruptcy protection on November 11, prompting allegations of misappropriation of billions of dollars in client funds and other misconduct.
- FTX is also seeking to recover millions of dollars it paid to prominent endorsers and sports teams before its bankruptcy, including retired basketball player Shaquille O’Neal, tennis pro Naomi Osaka and the National Basketball Association team Miami Heat.
- Meanwhile, Sam Bankman-Fried, FTX founder and former CEO, was jailed on August 11 for witness tampering after being arrested in the Bahamas in December 2022. He maintains his innocence and has pleaded not guilty to all 13 charges brought against him, including billions of dollars in wire and securities fraud.
See related article: Bankrupt FTX recovers $7.3 billion in assets and considers resuming operations
