FTX Asks for Court Approval for Sale of $744M Worth of Trust Assets

Crypto giant FTX, which filed for bankruptcy in November last year​, has requested authorization from the Delaware Bankruptcy Court to sell approximately $744 million worth of trust assets, including assets held in five Grayscale Trusts, totaling an estimated $691 million, and one trust managed by Bitwise, amounting to $53 million, based on the market value as of October 25, 2023. These trusts allow investors to gain exposure to digital assets without owning them.

In the court filing dated Friday, November 3, FTX stated: "The Debtors' proposed sale(s) or transfer(s) of the Trust Assets will help allow the estates to prepare for forthcoming dollarized distributions to creditors and allow the Debtors to act quickly to sell the Trust Assets at the opportune time. Additionally, because the Debtors may sell the Trust Assets to one or more buyers in one or more sales, sales pursuant to the Sale Procedures will alleviate the cost and delay of filing a separate motion for each proposed sale."

The filing explained: "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 debtor's' plan of reorganization."

Furthermore, FTX has proposed to hire an investment adviser and establish a pricing committee composed of all stakeholders to oversee the sales process.

To date, FTX's administrators have recovered about US$7 billion in assets, including $3.4 billion of crypto​ that was permitted by the U.S. Court in September to be liquidated.

It is worth noting that earlier this month, Sam Bankman-Fried, FTX Founder and owner, was found guilty of fraud and money laundering and may face decades in prison. His sentencing has been set for 28 March 2024.