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FTX approved to sell $873M in assets for creditor repayment

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FTX has been granted permission to sell approximately $873 million worth of its trust assets in a Delaware bankruptcy court filing. The funds will be used to compensate creditors affected by the company’s collapse in 2022. This amount includes stakes in trusts from Grayscale Investments, valued at $807 million, and Bitwise, valued at $66 million.

It is important to note that the $744 million asset valuation mentioned in the court document was accurate as of October 25 and may not reflect the current value.

On November 3, FTX requested the sale of six cryptocurrency trusts, including Grayscale Bitcoin Trust and Grayscale Ethereum Trust. This motion was approved on November 29. At the time of the motion filing, FTX owned over 22 million units of GBTC valued at $691 million and over 6 million units of ETHE valued at $106 million.

FTX offers the option to sell not only Grayscale Bitcoin Trust and Grayscale Ethereum Trust but also Grayscale Ethereum Classic Trust, Litecoin Trust, and Digital Large Cap Trust. This move aims to generate funds for FTX to repay creditors, rebuild trust, and demonstrate a long-term commitment to sustainability. If successful, this plan could solidify FTX’s position in the competitive crypto exchange landscape.

Since the collapse of Sam Bankman-Fried’s empire in November 2022, FTX’s administrators have been actively working to recover assets. They are now authorized to sell trust assets from Grayscale. It has been reported that these administrators have already managed to recover approximately $7 billion in assets, including $3.4 billion in cryptocurrencies.

In June 2022, it was estimated that around $8.7 billion in customer assets were misappropriated, resulting in FTX debtors. Sam Bankman-Fried was convicted on seven counts of fraud on November 2, 2022, and is scheduled to be sentenced on March 28, 2024.

There have also been reports that Sam Bankman-Fried recently bartered mackerels for a haircut at Brooklyn’s Metropolitan Detention Center.

 

Read also: SBI Holdings partners with Circle for USDC circulation and web3 services

 

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