A court document on Friday states that the creditors of bankrupt cryptocurrency exchange FTX have requested permission from the U.S. bankruptcy court located in Delaware to sell certain trust assets, which include money belonging to Bitwise and Grayscale that are believed to be worth $744 million, through an investment adviser.
“The Debtors’ proposed sale(s) or transfer(s) of the Trust Assets will help allow the estates to prepare for forthcoming dollarized distributions to creditors and allow the Debtors to act quickly to sell the Trust Assets at the opportune time,” the filing said. “Additionally, because the Debtors may sell the Trust Assets to one or more buyers in one or more sales, sales pursuant to the Sale Procedures will alleviate the cost and delay of filing a separate motion for each proposed sale.”
Prior to filing for bankruptcy in November of last year, FTX was among the biggest cryptocurrency exchanges globally. This was after a CoinDesk investigation revealed that the company had been embezzling customer funds.A jury this week found FTX founder Sam Bankman-Fried guilty of cheating his lenders and clients.The date of sentencing has been provisionally scheduled for March 28, 2024.While 115 years in prison is the maximum sentence that might be imposed on him, experts estimate that he could only serve 15 to 20 years in prison.
According to the market valuation as of October 25, 2023, the “trust assets” are held in one Bitwise-managed trust for $53 million and five Grayscale Trusts for an estimated $691 million.Investors can access digital assets through trusts without actually owning them.
“The debtors’ judgment is that proactively mitigating the risk of price swings will best protect the value of the Trust Assets, thereby maximizing the return to creditors and promoting an equitable distribution of funds in the debtor’s’ plan of reorganization,” the filing said.
In addition to hiring an investment adviser, the debtors suggested forming a pricing committee with representatives from each stakeholder group.Prior to the asset sale, the investment adviser must also get at least two bids from various counterparties.Digital Currency Group (DCG) is the parent firm of both CoinDesk and Grayscale.