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The sale of around $873 million in trust assets by the insolvent cryptocurrency exchange FTX can now begin, and the money will go toward paying back creditors who were affected by the business’s bankruptcy in 2022.
A filing in a bankruptcy court in Delaware dated November 29 states that the debtors are given permission, but not an order, to sell the trust assets using their best business judgment and following these selling processes.
FTX To Liquidate $873 Million In Crypto Trusts
Based on court records, FTX intends to sell the assets in a way that optimizes value while avoiding market disruption for the digital investments. Grayscale offered financial products connected to different virtual currencies. Grayscale arranged and administered trusts for the buyers, so they did not own the actual currency.
The $873 million in assets will come from FTX’s holdings in a number of trusts issued by Bitwise, a custodial service provider, and Grayscale Investments, a cryptocurrency asset management, with a combined value of $807 million and $66 million.
The decision was given almost four weeks after the FTX debtors asked Judge John Dorsey to sell the six cryptocurrency trusts, which included the Bitwise 10 Crypto Index Fund, the Grayscale Bitcoin Trust, and the Grayscale Ethereum Trust.
FTX Approved to Start Selling $744 Million in Grayscale Assets: BBG
— Tree News (@News_Of_Alpha) November 29, 2023
The advisors of FTX have been looking for assets and attempting to sort through a complicated web of debts owed to several creditors, including users who have placed cash and cryptocurrency on the trading platform, ever since the company filed for bankruptcy last year due to fraud claims.
Before going bankrupt in November of last year due to news exposing the precarious balance sheet of FTX sibling trading firm Alameda Research, the cryptocurrency exchange, which was originally run by Sam Bankman-Fried, was among the biggest trading platforms in the world.
FTX Administrators Recover $7 Billion In Assets
According to court filings, the administrators of FTX have so far retrieved assets worth almost $7 billion, including $3.4 billion in cryptocurrency.
Following a recent guilty verdict on seven counts of charges, Bankman-Fried is currently awaiting sentencing in March 2024.
For the time being, he is being held at Brooklyn’s Metropolitan Detention Center, where he just paid four mackerels for a haircut.
He could spend 115 years behind bars.
The approval of FTX to sell assets to pay creditors has caused the value of the FTX token (FTT) to soar by 8%.
Upon writing, FTT was trading at approximately $4.26. The Relative Strength Index (RSI), which indicates persistent momentum, is currently above the 50 mark, suggesting more gains.
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