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FTX seeks sale, transfer of trust assets with value of $744 million
By Sarah Lizee
Olympia, Wash., Nov. 6 – FTX Trading Ltd. is seeking court approval to sell or transfer assets in six digital currency trusts valued at roughly $744 million, according to a motion filed Friday with the U.S. Bankruptcy Court for the District of Delaware.
The trusts consist of the Grayscale Bitcoin Trust, Grayscale Ethereum Trust, Bitwise 10 Crypto Index Fund, Grayscale Ethereum Classic Trust, Grayscale Litecoin Trust and Grayscale Digital Large Cap Trust.
FTX said the sale or transfer would protect the debtors against potential downward price swings in the trust assets, maximize the value of the debtors’ estates, and allow for forthcoming dollarized distributions to creditors.
“The debtors’ judgment is that proactively mitigating the risk of price swings will best protect the value of the trust assets, thereby maximizing the return to creditors and promoting an equitable distribution of funds in the debtors’ plan of reorganization,” the company said in the motion.
“It also is prudent for the debtors to obtain authorization to conduct sales of the trust assets at this time in order to preserve flexibility in advance of plan confirmation and time transactions so as to minimize any potential negative effects on market prices.”
FTX said that the debtors, in consultation with the official committee of unsecured creditors and the informal committee of non-U.S. customers of FTX.com, will retain an investment adviser to assist the debtors in monetizing the trust assets.
FTX said the debtors do not believe there are any valid liens on the trust assets, but any valid liens will attach to the proceeds of sales or transfers of any pledged trust assets and be paid from the proceeds.
A hearing on the motion is scheduled for Nov. 29.
FTX has headquarters in the Bahamas and filed Chapter 11 bankruptcy on Nov. 11, 2022 under case number 22-11068.
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