In a court hearing on Wednesday, a US bankruptcy court in Delaware accepted the plan to sell the cryptocurrency assets of the defunct FTX exchange. According to restructuring expert John J., the company run by Ray III is attempting to pay off its debts while also considering perhaps updating the trading platform.
Court records state that Judge John Dorsey of the Delaware Bankruptcy Court permitted the bankrupt exchange to liquidate up to US$100 million in cryptocurrency per week. If two committees representing FTX clients approve, the cap could rise to US$200 million.
Additionally, FTX intends to use an investment advisor to hedge and stake its cryptocurrency. The company anticipates that these techniques will reduce the risk of price volatility and generate passive interest, in accordance with the approved proposal.
The business has appointed Mike Novogratz, the former head of investment banking at Galaxy Asset Management, to serve as an advisor in the transaction.
The bankrupt cryptocurrency exchange possesses US$3.4 billion worth of cryptocurrency assets, according to court documents. It currently has Solana worth $1.16 billion, Bitcoin worth $560 million, and Ether worth 192 million dollars. Additionally, USDT and XRP stablecoins are held.
Following accusations of misappropriating billions of dollars in client assets and other wrongdoings, FTX and its sibling hedge fund Alameda Research filed for Chapter 11 bankruptcy protection on November 11.
In addition, FTX is attempting to recover millions of dollars it paid to sports teams and celebrities as endorsers prior to its bankruptcy, including retired basketball player Shaquille O’Neal, Naomi Osaka, a professional tennis player, and the Miami Heat of the National Basketball Association.
Sam Bankman-Fried, the founder and former CEO of FTX, was apprehended in the Bahamas in December 2022 and charged with witness tampering. He was sentenced to prison on August 11 of that year. He has defended his innocence and entered a not-guilty plea to each of the 13 allegations made against him. Wire fraud and securities fraud totaling billions of dollars were implicated.