FTX seeks sale of Grayscale and Bitwise trust assets worth $744 million

Bankrupt crypto exchange FTX has actually requested the insolvency court in Delaware to permit it to offer certain crucial trust funds, consisting of possessions from crypto possession supervisor Grayscale and custody service provider Bitwise valued at around $744 million.In a court filing dated Nov. 3, FTX debtors requested the court to enable them to sell Trust possessions as it will give way for the company to get ready for “forthcoming dollarized circulations to lenders.” These trust assets are held in one Bitwise trust valued at $53 million and five Grayscale trusts valued at $691 million. These crypto trusts serve as an onboarding tool for many and permit investors to get crypto direct exposure without owning one. Grayscale and Bitwise Trust Assets breakdown. Source: Court filingThe court filing read:” The Debtors judgment is that proactively alleviating the danger of price swings will best safeguard the worth of the Trust Assets, therefore taking full advantage of the return to lenders and promoting a fair circulation of funds in the Debtors plan of reorganization.” The FTX debtors requested that the sale of trust properties and sale treatments should be authorized by an investment advisor. They proposed a rates committee represented by the stakeholders to be part of the sale procedure.Related: Fuck regulators, stated SBF behind closed doors: ReportThe latest demand by FTX debaters for the sale of trust properties comes after the court had earlier approved the liquidation of almost $3.4 billion in crypto possessions. The court ordered the sale of these assets in batches of $50 million and $100 million to prevent any market dump. The FTX bankruptcy procedures are moving along as the previous 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 discovered guilty of two counts of wire fraud, 2 counts of wire scams conspiracy, one count of securities scams, one count of products scams conspiracy and one count of money laundering conspiracy. The judge is set to purchase sentencing in the case on March 28, 2024. Publication: Blockchain detectives– Mt. Gox collapse saw birth of Chainalysis

Other Questions People Ask

What are the implications of FTX seeking the sale of Grayscale and Bitwise trust assets worth $744 million?

The sale of Grayscale and Bitwise trust assets by FTX, valued at $744 million, is aimed at facilitating upcoming distributions to creditors during the bankruptcy process. By liquidating these assets, FTX hopes to mitigate the risks associated with price volatility, thereby maximizing returns for its creditors. This move follows a previous court approval for the liquidation of nearly $3.4 billion in crypto assets, indicating a strategic approach to managing its financial obligations.

How does the sale of Grayscale and Bitwise trust assets affect FTX's bankruptcy proceedings?

FTX's request to sell Grayscale and Bitwise trust assets is a critical step in its ongoing bankruptcy proceedings, as it seeks to generate funds for creditor payouts. The court filing emphasizes the importance of protecting the value of these trust assets to ensure fair distributions. Additionally, the involvement of an investment advisor and a pricing committee in the sale process aims to enhance transparency and stakeholder confidence during this complex financial restructuring.

What are Grayscale and Bitwise trusts, and why are they significant in FTX's asset sale?

Grayscale and Bitwise trusts are investment vehicles that allow investors to gain exposure to cryptocurrencies without directly owning them. The significance of these trusts in FTX's asset sale lies in their substantial valuation, with Grayscale trusts alone worth approximately $691 million. By selling these assets, FTX aims to leverage their value to facilitate creditor distributions while navigating its bankruptcy challenges effectively.

What steps has FTX taken regarding the liquidation of its crypto assets prior to the sale of Grayscale and Bitwise trust assets?

Prior to seeking the sale of Grayscale and Bitwise trust assets, FTX received court approval for the liquidation of nearly $3.4 billion in crypto assets. The court mandated that these assets be sold in smaller batches, ranging from $50 million to $100 million, to prevent significant market disruptions. This proactive approach reflects FTX's strategy to manage its asset liquidation carefully while addressing its financial responsibilities during bankruptcy.

What role will an investment advisor play in the sale of Grayscale and Bitwise trust assets by FTX?

An investment advisor will play a crucial role in overseeing the sale of Grayscale and Bitwise trust assets, ensuring that the process aligns with best practices for asset management. Their involvement is intended to safeguard the value of these assets during liquidation, ultimately benefiting creditors. Additionally, a pricing committee composed of stakeholders will be established to enhance transparency and fairness throughout the sale process.