Bankrupt cryptocurrency exchange FTX just has received approval from a bankruptcy court to sell its stakes in digital trusts managed by Grayscale Investments, according to a bankruptcy court document filed on Friday.
This move is part of FTX’s strategic efforts to repay billions owed to creditors.
The assets, valued at about $744 million last month, form a key component of FTX’s plan to manage its bankruptcy.
These stakes in various digital trusts, devised by Grayscale and Bitwise, offer investors direct exposure to cryptocurrencies without the need to take self-custody of them.
FTX’s approach in selling these assets aims to maximize their value while minimizing market disruptions, as outlined in the court documents.
The fallen exchange got the green light to start selling its crypto holdings in mid-September.
FTX on a Mission to Return Assets to Debtors
Since filing for bankruptcy last year amidst fraud allegations, FTX has been on a mission to recover assets and address a complex network of debts.
This includes obligations to customers who invested cash and cryptocurrencies on the platform.
So far, FTX’s administrators have successfully recovered around $7 billion in assets, including $3.4 billion in crypto, highlighting the scale and complexity of the company’s financial entanglements.
The court’s green light for FTX to proceed with these asset sales is a critical step in the company’s restructuring process. It underscores the challenges faced by cryptocurrency exchanges in balancing asset liquidation with maintaining stable market conditions.
This is particularly vital given the volatile nature of the cryptocurrency market and the potential impact of such substantial asset sales.
As FTX embarks on this crucial phase of its asset liquidation and restructuring, the broader cryptocurrency community and market observers will be closely watching how these sales affect the market.
The development comes after FTX unveiled a plan to kickstart a new offshore cryptocurrency exchange.
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