- FTX has been given the green light to sell its shares in crypto trusts.
- The trusts include products offered by asset managers Grayscale and Bitwise.
- Galaxy Digital has been mandated to help the exchange in the sale.
A Delaware bankruptcy court has given Sam Bankman-Fried’s fallen exchange FTX the nod to sell its asset holdings in various trusts worth hundreds of millions of dollars.
On November 3, FTX debtors filed a motion to sell six cryptocurrency trusts in preparation for “forthcoming dollarized distributions to creditors.” The trusts included Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index Fund (BITW), among others.
FTX Cleared to Sell $837M Shares in Grayscale and Bitwise Trusts
According to a bankruptcy court filing dated November 29, FTX has been given the green light to sell its stake in trusts issued by crypto asset managers Grayscale Investments and Bitwise and to use the proceeds to repay creditors impacted by the exchange’s collapse.
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Besides Bitwise’s BITW fund, FTX has over 32 million total shares spread across five Grayscale trusts, including the GBTC, ETHE, Ethereum Classic Trust (ETCG), Digital Large Cap Trust (GDLC), and Litecoin Trust (LTCN).
While an October 25 court filing cumulatively valued the trusts at $744 million, the amount has grown to $837 million following the recent rise in the value of crypto assets like Bitcoin and Ethereum.
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Of the $837 million, Grayscale’s GBTC Trust holds the majority at $597 million, followed by ETHE at $87 million.
Along with the approval, the court requested crypto custodian Galaxy Digital to support FTX in the asset sale process.
Court Expands Galaxy’s Mandate in FTX Bankruptcy Proceedings
Appointed FTX’s digital asset portfolio manager earlier this year, Galaxy Digital will help the exchange sell or transfer its trust assets as mandated by the bankruptcy court. On September 13, the firm was also mandated to help FTX liquidate its crypto assets worth $3.4 billion in tranches of up to $100 million weekly.
Per the proposed plan, FTX commits to repaying up to 90% of the value requested by its customers, subject to the bankruptcy court’s approval before 2024 Q2.
Read why FTX users have filed a lawsuit against the Mercedes F1 team:
FTX Users Target Mercedes F1 Team, MLB in Class-Action Lawsuit
Stay updated on why FTX recently sued Bybit:
FTX Sues ByBit for $953M in Fraudulent Withdrawals
