Insolvent cryptocurrency exchange FTX has been approved to initiate the sale of approximately $873 million in trust assets, aiming to repay creditors impacted by the company’s 2022 bankruptcy. A recent filing in a Delaware bankruptcy court on November 29 allows the exchange’s debtors to proceed with selling trust assets using their best business judgment and adhering to established selling processes.
FTX’s plan involves the liquidation of assets in a manner that maximizes value while minimizing market disruption for digital investments. The assets, valued at $807 million and $66 million, originate from FTX’s holdings in trusts issued by custodial service provider Bitwise and cryptocurrency asset management firm Grayscale Investments.
This decision comes nearly four weeks after exchange debtors sought permission from Judge John Dorsey to sell six cryptocurrency trusts, including the Bitwise 10 Crypto Index Fund, Grayscale Bitcoin Trust, and Grayscale Ethereum Trust.
FTX’s Recovering Assets
The exchange administrators, tasked with navigating a complex web of debts owed to various creditors since the exchange filed for bankruptcy amid fraud claims last year, have been actively seeking and recovering assets. The recovered assets, according to court filings, amount to nearly $7 billion, including $3.4 billion in cryptocurrency.
FTX, once among the world’s largest trading platforms, faced insolvency in November of the previous year following revelations about the precarious balance sheet of its sibling trading firm, Alameda Research, led by Sam Bankman-Fried.
Despite the challenges, FTX administrators have successfully retrieved significant assets, and the recent approval to sell assets for debt settlement has positively impacted the value of the FTX token (FTT), causing it to surge by 8%.
Meanwhile, Sam Bankman-Fried awaits sentencing in March 2024 after a recent guilty verdict on seven counts of charges. Currently held at Brooklyn’s Metropolitan Detention Center, his potential sentence could extend up to 115 years.