FTX Crypto Exchange to Sell Trust Assets Worth $873 Million
The bankrupt cryptocurrency exchange FTX has been approved to sell its trust assets, which are estimated at around $873 million, to repay creditors who have been hit by the exchange’s demise in 2022. The assets include stakes from various trusts issued by Grayscale Investments, a leading crypto asset manager and Bitwise, a custody service provider.
Details of the Assets Sale
The assets said to be liquidated totals $873 million, comprising Grayscale Investments valued at $807 million and Bitwise at $66 million. This figure is higher than the initial total of $744 million mentioned in the court documents, which was based on valuation figures dated back to October 25, 2023. The assets have since appreciated in value.
The approval came nearly a month after FTX debtors approached Judge John Dorsey on November 3, requesting that the six cryptocurrency trusts be sold. Among these trusts are noteworthy products such as the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index Fund (BITW).
Assets Breakdown
At present, FTX owns over 22 million units of GBTC, Grayscale’s primary Bitcoin product, now worth $691 million, while its 6.3 million shares of ETHE are estimated to be around $106 million. FTX is also expected to sell its shares for the Grayscale’s Ethereum Classic Trust (ETCG), Litecoin Trust (LTCN) and Digital Large Cap Trust (GDLC) as part of asset recovery efforts.
Recovering Asset Efforts
John. J Ray III, leading FTX’s administrators, has been working on retrieving the lost assets since the downfall of Sam Bankman-Fried’s empire in November 2022. Thus far, approximately $7 billion in assets have been recovered, with almost half that amount in cryptocurrencies ($3.4 billion). FTX’s debtors previously speculated that the gross misappropriation of customer assets was around $8.7 billion.
Sam Bankman-Fried Conviction
In the meantime, Bankman-Fried, the mastermind behind the failed exchange, was found guilty on seven fraud-related counts on November 2 and is due to be sentenced on March 28. Currently, he is kept at Brooklyn’s Metropolitan Detention Center while awaiting his court sentencing.
The Risks of Crypto Exchanges
The collapse of the FTX exchange serves as a stark warning about the potential risks associated with cryptocurrency exchanges. As the world becomes more digitized, investors must be cautious about where they place their investments, keeping in view the lessons learned from the FTX saga.
