FTX debtors requested a sale of $744M in Grayscale and Bitwise Assets to Pay Off Debts

Key Points:

• FTX debtors requested a sale approval from the U.S. bankruptcy court to sell trust assets valued at $744 million, including funds from Grayscale and Bitwise.
• The sale aims to prepare for monetary distributions to creditors and enable prompt execution, reducing costs and delays associated with separate motions.
• The trust assets include five Grayscale Trusts worth $691 million and one trust managed by Bitwise worth $53 million. The sale aims to proactively mitigate price fluctuation risks and safeguard their value, maximizing returns for creditors and promoting equitable distribution of funds.

In addition to hiring an investment adviser, the FTX debtors requested a sale and proposed forming a pricing committee comprised of all parties.

FTX Debtors Requested a Sale of $744M Trust Assets to Prepare for Creditor Distributions

The FTX debtors requested a sale approval from the U.S. bankruptcy court in Delaware for the sale of trust assets. These assets, valued at around $744 million, include funds from Grayscale and Bitwise. The purpose of these proposed sales is to prepare for monetary distributions to creditors and enable prompt execution of the sales. This approach reduces costs and delays associated with separate motions, allowing for multiple sales to one or more buyers.

FTX, once one of the world’s largest cryptocurrency exchanges, declared bankruptcy following reports of misappropriation of customer funds. The founder of FTX, Sam Bankman-Fried, has been found guilty of defrauding customers and lenders. The sentencing is tentatively scheduled for March 28, 2024, with experts suggesting a realistic range of 15 to 20 years in prison.

Grayscale Bitcoin Trust Accounts for Bulk of FTX Trust Assets to be Sold

The trust assets primarily consist of five Grayscale Trusts worth approximately $691 million and one trust managed by Bitwise worth $53 million. These trusts provide investors exposure to digital assets without direct ownership. The sale of trust assets aims to proactively mitigate risks associated with price fluctuations and safeguard their value. This approach maximizes returns for creditors and promotes an equitable distribution of funds in the debtor’s plan of reorganization.

To ensure transparency, the debtors propose establishing a pricing committee with representation from all stakeholders. An investment adviser will obtain a minimum of two bids from different counterparties before proceeding with the sale of assets.

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