The embattled crypto trading platform FTX has secured bankruptcy court authorization to initiate the sale of its stakes in digital trusts under the management of the prominent crypto firm Grayscale Investments.
This development was captured in a recent report by Bloomberg, citing a fresh court document. Per the report, the move aims to generate funds essential for repaying FTX creditors owed substantial sums running into billions of dollars.
FTX Gets Approval to Liquidate $744M with Grayscale
As of last month, FTX’s stakes in Grayscale’s trusts were appraised at approximately $744 million, as disclosed in the cited court papers.
Notably, the court documents stated that FTX intends to execute the sale of these assets in a manner that maximizes their value. At the same time, the sale will happen in ways that minimize disruptions to the market for the corresponding digital investments.
The Bloomberg report noted Grayscale had offered investments associated with diverse digital currencies. While purchasers did not possess the physical currencies, they instead received shares in trusts curated and overseen by Grayscale.
It is worth mentioning that FTX’s strategic liquidation comes in the wake of its filing for bankruptcy In November 2022, coupled with allegations of fraud.
Since then, the company’s administrators have diligently pursued the recovery of assets and navigated the complexities of untangling a web of deficits owed to diverse creditors. It includes customers who had funds in both cash and crypto on the now-defunct trading platform.
Remarkably, FTX’s administrators have recovered about $7 billion in assets to date. Of the value, $3.4 billion are in cryptocurrencies, as detailed in court documents. This latest move to sell stakes in Grayscale-managed trusts represents a pivotal step in the ongoing efforts to settle FTX’s financial obligations.
The case, officially known as FTX Trading Ltd., 22-11068, is being overseen by the U.S. Bankruptcy Court for the District of Delaware.
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