The bankrupt cryptocurrency exchange FTX and its debtors filed a petition last Friday with the US Delaware Bankruptcy Court, requesting approval for the sale of certain trust assets worth an estimated $744 million held by Grayscale and Bitwise through an investment advisor.
FTX and Debtors Take Action for Trust Assets
In the application made by FTX and the debtors, it was stated that "the proposal of the debtors to sell or transfer the trust assets will help prepare for distributions to creditors in US dollars and enable the debtors to quickly move to sell the trust assets at the appropriate time." It was also mentioned that "selling the trust assets to one or more buyers in one or more sales will reduce the cost and delay of making a separate request for each proposed sale according to the sales procedures."
The "trust assets" are held in a total of five Grayscale Trusts, with an estimated value of $691 million as of October 25, 2023, and in a trust managed by Bitwise with a value of $53 million. Trusts allow to invest in cryptocurrencies without directly owning them.
The court application stated that "the debtors' prediction is that this will best protect the value of the trust assets by proactively reducing price volatility risk, thus maximizing returns for creditors and encouraging fair distribution of funds in the debtors' restructuring plan."
In addition to using an investment advisor, FTX and the debtors also proposed the establishment of a pricing committee representing all stakeholders. The investment advisor will need to obtain at least two offers from different parties before selling the assets.
Sam Bankman-Fried Found Guilty of 7 Charges
As it is known, FTX was one of the world's largest cryptocurrency exchanges before filing for bankruptcy in November last year, following the revelation that customer funds had been misappropriated by the company.
Sam Bankman-Fried, the founder and former CEO of FTX, was found guilty of 7 charges, including defrauding customers and lenders, in a trial last week. The sentencing date was temporarily set for March 28, 2024. Experts expect Bankman-Fried, who theoretically could face a sentence of 115 years in prison, to receive a sentence of 15-20 years.
