FTX Gets Court Approval to Sell $873M Worth of Grayscale, Bitwise Trust Assets
FTX held shares of five Grayscale Trusts and one Bitwise trust, according to an earlier court filing. The crypto firm Galaxy won court approval for an expansion of its mandate in helping to dispose of assets.
Updated Mar 8, 2024, 5:48 p.m. Published Nov 29, 2023, 10:32 p.m.
The FTX estate was granted approval to sell its trust assets, including shares of Grayscale and Bitwise investment funds worth roughly $873 million, according to a Delaware bankruptcy court document filed on Friday and CoinDesk analysis.
"The debtors are authorized, but not directed, to execute sales of the trust assets, in their reasonable business judgment, in accordance with the following sale procedures," the filing said.
The court also expanded crypto investment firm Galaxy's mandate to assist FTX in the sales of its trust assets, according to a Tuesday court filing. FTX tapped Galaxy earlier this year to manage the estate's vast digital asset holdings.
FTX's trust assets include shares in various Grayscale funds, including in Grayscale Bitcoin Trust (GBTC) and a Bitwise crypto index fund, which was worth a total of $744 million as of October 25, according to a court document filed on Nov. 3.
However, FTX's trust holdings now could be worth even more, about $873 million, as GBTC's discount to its net asset value has narrowed with bitcoin rally, according to CoinDesk's calculation based on the reported shareholdings in the court filing and Wednesday market closing prices per TradingView data. The roughly 17% appreciation since Oct. 25 can be explained by the rally in cryptocurrency prices over the past month.
The crypto exchange, once helmed by Sam Bankman-Fried, was one of the world’s largest trading platforms before it went bankrupt in November last year following a CoinDesk report revealing the shaky balance sheet of FTX sister trading firm Alameda Research.
Read more: What Happens to GBTC Discount When FTX Sells its Holdings?
UPDATE (Nov. 29, 22:53 UTC): Adds detail about the current estimated market value of trust assets using Wednesday market closing prices.
UPDATE (Nov. 29, 23:26 UTC): Adds detail about Galaxy Digital assisting in selling trust assets.
Krisztian Sandor
Krisztian Sandor recently graduated from NYU's business and economic reporter program as a Fulbright fellow and worked with Reuters and Forbes previously. Originally from Budapest, Hungary, he is now based in New York. He holds BTC and ETH.
