- Five Grayscale trusts are holding assets worth $691 million.
- The trusts operate as an onboarding vehicle enabling investors to obtain crypto exposure.
The insolvent cryptocurrency exchange FTX petitioned in court last Friday, November 3, to sell off crucial Trust funds worth a total of $744 million. Some of the funds are held by custodial service provider Bitwise and cryptocurrency asset management Grayscale, as shown by the filing.
One Bitwise trust is holding assets worth $53 million, while five Grayscale trusts are holding assets worth $691 million. The trusts operate as an onboarding vehicle enabling investors to obtain crypto exposure without owning the assets.
Getting Ready to Pay Back Creditors
The major reason for selling these “trust assets” is to help the estates get ready to pay back creditors, and to provide FTX the freedom to sell them whenever it’s most profitable to do so. The court document explains how eliminating the need to submit individual papers for each proposed sale would save expenses and speed up the selling process.
Moreover, debtors of FTX have approached an investment advisor requesting permission to sell trust assets. They’ve also proposed forming a pricing committee made up of interested parties to discuss prices before the transaction is finalized.
After the court had already approved the liquidation of around $3.4 billion in crypto assets, FTX debtors made this motion. To avoid any catastrophic market sell-offs, the court had ordered the sale of these assets in $50 million and $100 million chunks. On the other hand, FTX founder Sam Bankman-Fried (SBF) was found guilty of fraud last week in a US court.
Highlighted Crypto News Today:
