Breaking: Court Approves FTX’s Request to Liquidate Crypto Assets – Which Coins Will Be Impacted?
In a major development today, FTX has received judicial approval to liquidate its cryptocurrency assets to repay its creditors.
The permission came from the U.S. Bankruptcy Court for the District of Delaware. This move enables FTX, which is undergoing bankruptcy proceedings, to not only sell but also stake and hedge its substantial cryptocurrency portfolio, currently valued at more than $3.4 billion.
During the court session, Judge John Dorsey gave the green light to FTX's request, despite objections against the proposal. Legal representation for a group of FTX users showed their support for the proposal at the hearing.
Additionally, an attorney for the committee of unsecured creditors mentioned that all parties involved wanted to speed up the resolution.
"The sooner we can get this process rolling, the better," he said.
Earlier in August, FTX had formally asked the court for authorization to perform these financial maneuvers. The argument put forth was that by hedging its cryptocurrency holdings, the company could minimize potential losses before selling assets like Bitcoin or Ether. Staking specific digital currencies, as per FTX's legal team, would generate low-risk income from these otherwise dormant assets.
During the hearing, the judge asked for clarity about asset ownership within FTX's cryptocurrency pool. One attorney for the exchange clarified that FTX considers these digital assets to belong to the debtors. Another legal representative pointed out that these assets are lumped together in a single pool and could not be linked back to any specific customer.
FTX has also expressed an interest in bringing on Mike Novogratz from Galaxy Digital as an advisor for the exchange.
Earlier this week, FTX provided details about
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