FTX Cleared to Sell Grayscale Bitcoin Trust (GBTC) Shares Worth Almost $700 Million
The bankrupt FTX exchange has received authorization to offload approximately $873 million worth of trust assets. These assets, primarily comprising stakes in trusts issued by crypto asset manager Grayscale Investments and custody service provider Bitwise, will be utilized to settle debts owed to creditors affected by FTX’s collapse in 2022.
The breakthrough was unveiled through a filing made on November 29th in a Delaware bankruptcy court. The specifics detailed in the court document shed light on the allocation of assets, with a substantial portion — $807 million — attributed to FTX’s interests in various trusts managed by Grayscale Investments. Additionally, a further $66 million is linked to FTX’s holdings in Bitwise.
However, the initial valuation of $744 million mentioned in the filing represents a figure as of October 25, 2023. It’s crucial to note that the asset valuation has surged since that date, marking a noteworthy uptick in their overall worth.
The recent court approval arrives almost a month following FTX debtors’ plea, submitted on November 3rd, urging Judge John Dorsey for permission to liquidate six cryptocurrency trusts. Among these are prominent entities like the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index Fund (BITW). Presently, FTX boasts ownership of over 22 million units of GBTC, the flagship Bitcoin product offered by Grayscale, now valued at an impressive $691 million. Similarly, their holdings of 6.3 million shares of ETHE have accumulated an approximate value of $106 million in today’s market.
This pivotal decision to sell off these trust assets not only signifies a step towards resolving FTX’s financial obligations but also showcases a move to stabilize the aftermath of the exchange’s collapse in 2022. The injection of these funds is anticipated to alleviate the burden on creditors significantly.
The permission granted by the court represents a pivotal juncture in the legal proceedings surrounding FTX’s bankruptcy case. The sale of these assets, especially given their increased valuation, holds promise in ameliorating the adverse impact felt by those affected by the exchange’s downfall.
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