FTX aims to repay creditors by selling off Grayscale and Bitwise trust assets, following founder's conviction for fraud
FTX, a cryptocurrency exchange that declared bankruptcy in November 2023, is seeking approval from the U.S. bankruptcy court to sell off trust assets worth $744 million. These assets include funds from Grayscale and Bitwise. The move is part of FTX's efforts to prepare for upcoming distributions to creditors. This comes after the company's founder, Sam Bankman-Fried, was found guilty of defrauding customers and lenders.
The trust assets that FTX intends to sell include five Grayscale Trusts valued at $691 million and one trust managed by Bitwise valued at $53 million. The sale will be conducted through an investment adviser and will involve obtaining multiple bids from different counterparties. This approach is designed to ensure that the assets are sold at the right time and at the best possible price.
FTX filed for bankruptcy after reports of customer fund misappropriation surfaced. The company's founder, Sam Bankman-Fried, was subsequently found guilty of defrauding customers and lenders. The bankruptcy proceedings are still ongoing.
Prior to this request, the court had already approved the liquidation of $3.4 billion in crypto assets. The proposed sale of the Grayscale and Bitwise trust assets is therefore part of a larger effort to liquidate FTX's assets and repay its creditors.
The case of FTX serves as a cautionary tale about the potential risks involved in the cryptocurrency industry. It underscores the importance of regulatory oversight and the need for investors to exercise due diligence when choosing a cryptocurrency exchange. The ongoing bankruptcy proceedings and the proposed asset sale will be closely watched by industry observers and could have significant implications for the broader cryptocurrency market.