FTX Gets Permission To Sell Assets To Finally Repay Customers

FTX, the infamous and currently bankrupt crypto exchange, has received approval to sell approximately $873 million worth of trust assets, as disclosed in a filing in a Delaware bankruptcy court on November 29th, 2023.

Time to pay up

The assets, sourced through the stakes FTX placed in various trusts by Grayscale Investments and Bitwise, aim to repay creditors affected by the notorious collapse in 2022. Notably, the $873 million includes $807 million via the Grayscale trusts and $66 million by Bitwise. The court document initially mentions $744 million in assets as of October 25th, 2023, but their value has since increased.

The approval follows a motion filed by FTX debtors on November 3rd to sell six cryptocurrency trusts, including GBTC, ETHE, and Bitwise 10 Crypto Index Fund. FTX owns over 22 million units of GBTC, valued at $691 million, and 6.3 million shares of ETHE, valued at around $106 million. Additionally, FTX can sell the Grayscale Ethereum Classic Trust, Litecoin Trust, and Digital Large Cap Trust to recover funds for affected customers.

Justice prevails

FTX administrators, led by John J. Ray III, have been working on asset recovery since the aforementioned collapse that occurred last November, securing around $7 billion, with nearly half of that amount coming through cryptocurrencies. This past June, debtors estimated $8.7 billion in misappropriated customer assets. Meanwhile, disgraced FTX founder Sam Bankman-Fried was convicted on seven fraud-related charges on November 2nd and is currently awaiting sentencing on March 28th, 2024. He is presently located in the Brooklyn Metropolitan Detention Center.

Sam was accused of spending lavishly and engaging in speculative trading with FTX customer funds through Alameda Research, the sister hedge fund of the FTX crypto exchange. Prosecutors used emails, bank statements, and wire transfers to detail how customer funds were allegedly spent.