FTX Trading won court approval to begin selling digital currency from its hoard of US$3.4 billion worth of crypto assets to raise money for creditors who claim they are owed tens of billions of US dollars.
Sales are likely to begin even before a lawsuit challenging the company’s ownership of much of the crypto assets is resolved. A group of non-US creditors backed the sale proposal even though their lawsuit argues that FTX does not own crypto that customers put on the FTX.com exchange.
The company and committees representing both US and foreign creditors have agreed that FTX should sell as much as US$100 million of crypto a week, depending on the market prices. The goal is to convert digital assets into US dollars for distribution to creditors once FTX wins final court approval of a payout plan.
“We are not in a rush, but we expect to do it based on market opportunities as the case proceeds,” Andrew Dietderich, an attorney for FTX said after the court hearing in Wilmington, Delaware.
Since filing for bankruptcy last year, FTX advisers have been tracking down assets and trying to untangle a complex web of debts owed to various creditors, including customers who put cash and crypto on the trading platform.
US bankruptcy judge John Dorsey initially questioned whether he should authorise FTX to sell the crypto since some creditors argue it is their property, not an asset of the bankrupt company. Lawyers for the two main creditor groups said that issue should not stop the company from selling crypto when the price is right. Waiting could force FTX to unload crypto in a rush, hurting prices and undermining what creditors would recover.
The business time Published Thu, Sep 14, 2023