FTX is requesting permission to sell Grayscale and Bitwise funds
While it goes through bankruptcy, FTX hopes to recoup some of its $744 million in debt by selling its Grayscale and Bitwise businesses.
Troubled cryptocurrency exchange FTX has filed a petition with the US bankruptcy court in Delaware to liquidate trust assets in order to meet its financial commitments and emerge from bankruptcy.
The plan details the sale of trust assets valued at around $744 million, comprised of cash from Grayscale and Bitwise.
Once a dominant participant in the cryptocurrency exchange market, FTX declared bankruptcy in November of last year after claims of the misuse of client assets. Trying to sell “trust assets” will help the owners get ready to give money to creditors and make it easier to sell these things at the best time.
About $691 million is held in five Grayscale Trusts and another $53 million is handled by Bitwise; these are the assets slated for sale. The market rates as of October 25, 2023, were used to determine these prices. Investors might indirectly obtain exposure to digital assets via these trusts.
This proposed sale is being considered to proactively manage price volatility risk, protecting the value of the trust’s assets. This method is used in a debtor’s plan of reorganization to ensure that all creditors get the highest possible return and that all of the funds are distributed fairly.
The idea calls for the hiring of an investment advisor and the formation of a pricing committee on which all relevant parties would have a voice. For the sake of openness and a correct valuation of assets, the investment advisor will be required to solicit at least two bids from unaffiliated third parties.
Sam Bankman-Fried, the exchange’s founder, was recently convicted guilty of all counts relating to the FTX crypto exchange’s demise.
The preliminary sentencing date is March 28, 2024, and it might mean a very long imprisonment sentence, with estimations ranging from 15 to 20 years.
This event is not only important for FTX and its creditors, but also for the cryptocurrency sector as a whole, as it throws light on the difficulties and dangers encountered by those involved in the dynamic digital asset market.