Bankrupt crypto exchange FTX has requested the bankruptcy court in Delaware to allow it to sell certain key trust funds, including assets from crypto asset manager Grayscale and custody service provider Bitwise valued at around $744 million.
In a court filing dated Nov. 3, FTX debtors requested the court to allow them to sell Trust assets as it will make way for the firm to prepare for “forthcoming dollarized distributions to creditors.”
These trust assets are held in one Bitwise trust valued at $53 million and five Grayscale trusts valued at $691 million. These crypto trusts act as an onboarding tool for many and allow investors to gain crypto exposure without owning one.
The court filing read:
“The Debtors’ judgment is that proactively mitigating the risk of price swings will best protect the value of the Trust Assets, thereby maximizing the return to creditors and promoting an equitable distribution of funds in the Debtors’ plan of reorganization.”
The FTX debtors requested that the sale of trust assets and sale procedures should be approved by an investment adviser. Also, they proposed a pricing committee represented by the stakeholders to be part of the sale procedure.
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The latest request by FTX debaters for the sale of trust assets comes after the court had earlier approved the liquidation of nearly $3.4 billion in crypto assets. The court ordered the sale of these assets in batches of $50 million and $100 million to avoid any market dump.
The FTX bankruptcy proceedings are moving along as the former FTX CEO Sam Bankman-Fried was found guilty by a jury on all seven counts during his criminal trial in New York. The former CEO was found guilty of two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy and one count of money laundering conspiracy. The judge is set to order sentencing in the case on March 28, 2024.
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