FTX Approved to liquidate $744M in Grayscale Assets

Key Points: 

• FTX approved to liquidate $744M worth of stakes in digital trusts managed by Grayscale Investments.
• The sale of these assets is a major step towards repaying billions of dollars owed to creditors.
• FTX founder Sam Bankman-Fried was found guilty of all seven charges by a jury last month and potentially faces more than 100 years’ imprisonment.

In a major step towards repaying billions of dollars owed to creditors, FTX approved to liquidate $744M worth of stakes in digital trusts managed by Grayscale Investments.

FTX Approved To Liquidate $744M in Grayscale Assets to Repay Creditors

FTX, which filed for bankruptcy last year after its collapse, has been working under new leadership to locate assets and untangle a complex debt network owed to various creditors, including customers who invested cash and crypto on the platform. So far, FTX’s administrators have managed to recover about $7 billion in assets, including $3.4 billion worth of crypto.

FTX expressed its readiness to sell its Grayscale assets held at Grayscale and Bitwise in a November 3 court filing. These Trust assets comprise various exchange-traded products Grayscale manages, including Bitcoin and Ethereum Trusts. FTX approved to liquidate $744M assets up for sale now includes it’s stakes in these trusts

FTX Liquidates Trust Assets to Mitigate Market Risk and Prepare for Creditor Distributions

FTX argued that liquidating these assets is crucial to mitigate against potential downturns in the Trust Assets’ price, maximize the Debtors’ estates’ value, and allow for upcoming dollarized distributions to creditors. The company believes this monetization of Trust Assets represents a sound exercise of business judgment that will benefit creditors and stakeholders by mitigating market risk and preparing the estates for plan distributions.

As part of its liquidation strategy, FTX plans to appoint an investment adviser, whose role will be to market and sell the Trust Asset under a court-approved investment services agreement. While the path to resolution is underway, the firm’s founder, Sam Bankman-Fried, was found guilty of all seven charges by the jury last month and potentially faces more than 100 years’ imprisonment.

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