In a significant development, the U.S. Bankruptcy Court for
the District of Delaware has granted crypto exchange FTX permission to sell,
invest, and hedge its crypto holdings, valued at over $3.4 billion, to settle
outstanding debts.
This ruling comes after FTX’s legal team filed a request for
authorization to engage in the sale of the digital assets, citing the benefits
of hedging crypto assets and generating returns from staking certain digital
assets for the estates and creditors.
Judge John Dorsey presided over the court hearing, where he not only approved the motion but also overruled objections raised by two parties opposing the plan. This pivotal decision allows FTX to initiate the process of selling, staking, and hedging its substantial crypto holdings.
FTX.com, its sister firm Alameda Research, and about 130 of its affiliates filed for bankruptcy last November after the misdeeds of its management surfaced. Sam Bankman-Fried, founder and former CEO of FTX, is facing several civil and criminal charges and is now behind bars, awaiting trial. Other top FTX and Alameda executives pled guilty and are cooperating with the investigators.
The charges of the bankrupt exchange were transferred to John J. Ray III, who assumed the role of FTX’s CEO following the bankruptcy filing.
A Massive Crypto Stash
FTX was one of the top crypto exchanges, which grew exponentially. The administrator of FTX first proposed to liquidate the crypto assets with $3.4 billion held by the bankrupt exchange last August. The proposal included a staged sell-off with a limit of $100 million worth of tokens per week, which can be increased to $200 million on an individual token basis. Mike Novogratz’s Galaxy Digital would be appointed as the investment manager responsible for the sale.
As estimated in January 2023, FTX holds $685 million in locked Solana tokens, $529 million in FTT tokens, $268 million in Bitcoin, and $90 million in Ethereum
