FTX Estate Gets Green Light to Sell $873M in Crypto Funds
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The bankrupt FTX estate, once headed by disgraced Sam Bankman-Fried, has secured court approval to offload trust assets, including holdings in Grayscale and Bitwise crypto funds valued at approximately $873 million.
As disclosed in a filing with a Delaware bankruptcy court last Friday, the FTX estate is now authorized to proceed with the sale of its trust assets, adhering to the outlined procedures.
Meanwhile, Galaxy, a crypto investment firm enlisted by FTX earlier this year to manage its substantial digital asset portfolio, has been granted an expanded role to aid in this process, according to a Tuesday court filing.
The trust assets in question comprise shares in various Grayscale funds, such as the Grayscale Bitcoin Trust (GBTC) and a Bitwise crypto index fund. As of October 25, these holdings were valued at $744 million, as per a November 3 court document.
However, with the narrowing of GBTC’s discount to its net asset value amidst a Bitcoin rally and a subsequent 17% surge in cryptocurrency prices since October 25, the total worth of the assets may have risen to $873 million.
The Fall of FTX
The FTX estate emerged following the November 2022 bankruptcy of FTX, one of the globe’s major crypto trading platforms. The bankruptcy was triggered by a revealing CoinDesk report exposing the precarious balance sheet of Alameda Research, FTX’s sister trading firm, along with the revelation that FTX had been operating without a license in multiple jurisdictions.
This court-approved move to liquidate assets marks a crucial step for the FTX estate, offering insights into the intricate aftermath of FTX’s downfall and the subsequent management of its considerable crypto holdings. Investors and industry observers will undoubtedly keep a close eye on how this unfolds in the dynamic landscape of cryptocurrency finance.
