FTX Wants to Sell $744 Million in Grayscale and Bitwise Assets

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Last Updated on November 6, 2023 by Bitfinsider

According to a court filing on Friday, bankrupt crypto exchange FTX and its debtors have petitioned the United States Bankruptcy Court for the District of Delaware to permit the sale of some trust assets, funds of Grayscale and Bitwise valued at an estimated $744 million, through an investment adviser.

“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,” according to the statement. “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.”

FTX was one of the world’s largest crypto exchanges before declaring bankruptcy in November of last year, following a CoinDesk story that exposed the firm’s theft of customer funds.

A jury found FTX founder Sam Bankman-Fried guilty of cheating his clients and lenders last week. A projected sentencing date of March 28, 2024 has been scheduled. According to experts, he may face 115 years in prison in theory, but in practice, he could face between 15-20 years.

Based on the market valuation as of October 25, 2023, the “trust assets” are held in five Grayscale Trusts totaling an estimated $691 million and one Bitwise Trust totalling $53 million. The trusts allow investors to obtain exposure to digital assets without really owning them.

“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,” according to the document.

Aside from hiring an investment adviser, the debtors have proposed forming a pricing committee comprised of all parties. Before selling assets, the investment adviser must acquire a minimum of two bids from separate counterparties.

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