Bankrupt crypto exchange FTX just got the go-ahead to cash in roughly 32 million shares in digital asset trusts, a move aimed at clawing back funds for creditors burned by its 2022 collapse.
A Delaware bankruptcy court filing from November 29 greenlit the sale of about $873 million in assets, with the haul set to help make things right for those left in the lurch.
The filing puts it plainly: FTX’s team can sell these trust stakes “in their reasonable business judgment” whenever they see fit, following set procedures. Galaxy, a big-name crypto investment outfit, is stepping up to handle the heavy lifting. They’d already been tapped earlier this year to wrangle FTX’s hefty digital pile, and now they’re front and center in this latest sell-off push.
What’s on the block? FTX’s stakes in trusts run by Grayscale Investments and Bitwise. The Grayscale chunk’s pegged at $807 million, including over 22 million units of the Grayscale Bitcoin Trust (GBTC) now worth $691 million and 6.3 million shares of the Grayscale Ethereum Trust (ETHE) at $106 million, plus smaller bits like Ethereum Classic, Litecoin, and Digital Large Cap trusts.
Bitwise’s piece adds another $66 million to the pot. The court docs initially valued it all at $744 million back on October 25, 2023, but a crypto price surge—think Bitcoin and Ethereum—bumped it up to $873 million.
This all kicked off about a month ago when FTX’s debtors asked Judge John Dorsey on November 3 to let them unload six trusts, including GBTC, ETHE, and Bitwise’s 10 Crypto Index Fund. Now, with the nod, they’re moving fast. Since Sam Bankman-Fried’s empire crumbled in November 2022, FTX’s cleanup crew, led by John J. Ray III, has been on a mission. So far, they’ve rounded up $7 billion—$3.4 billion of it in crypto—though June estimates pegged the total customer cash misadventure at $8.7 billion.
Meanwhile, Bankman-Fried’s own saga rolls on. Convicted on seven fraud counts last November 2, he’s cooling his heels at Brooklyn’s Metropolitan Detention Center, awaiting a March 28 sentencing. Word is, he’s traded four mackerels for a jailhouse haircut—a far cry from the high-flying days before FTX’s epic flop.
