December 1, 2023

FTX Receives Court Approval to Liquidate $873 Million in Assets for Creditor Repayment

A Delaware bankruptcy court has granted permission for FTX to sell $873 million in trust assets. The proceeds will be utilized to reimburse creditors, marking a significant step in the resolution process as the founder, Sam Bankman-Fried, awaits sentencing.

In a pivotal development, a Delaware bankruptcy court has officially sanctioned FTX's plan to liquidate $873 million in trust assets, providing a crucial avenue for repaying creditors. The assessed value of these assets surged to nearly $873 million, comprising $807 million from Grayscale Investments and $66 million from Bitwise.

On November 3, FTX debtors formally requested the sale of six cryptocurrency trusts, encompassing Grayscale's bitcoin (BTC) and ether (ETH) trusts, along with Bitwise's Crypto Index Fund. FTX holds substantial stakes in these trusts, with ownership of over 22 million units in the Grayscale Bitcoin Trust (GBTC) and 6.3 million in the Grayscale Ethereum Trust (ETHE).

The sales strategy extends to include Ethereum Classic (ETC), Litecoin (LTC), and Digital Large Cap trusts from Grayscale, aiming to generate funds for the restitution of affected FTX customers.

Since FTX's collapse, administrators have successfully recovered approximately $7 billion in assets, of which $3.4 billion comprises cryptocurrencies. Although due to past year's price increases. The total misappropriation of customer assets amounts to $8.7 billion.

Amidst these developments, Sam Bankman-Fried, the convicted founder of FTX, is presently detained at Brooklyn's Metropolitan Detention Center, awaiting sentencing on fraud charges. Notably, he recently bartered mackerels for a haircut within the confines of the detention center.

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