Court Approves FTX Estate’s Sale of $870M in Grayscale and Bitwise Shares Amid Surging Claim Transfers

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The Delaware District’s U.S. Bankruptcy Court has greenlit the FTX estate’s disposal of trust assets. This sanction, issued on November 29, 2023, paves the way for the beleaguered crypto exchange to offload investments in several funds, including Grayscale and Bitwise stakes. Furthermore, the FTX Trading Ltd. record, maintained by restructuring entity Kroll, is swamped with the assignment of claims to new holders, as creditors opt to trade their claims for immediate financial gain.

FTX Granted Approval to Sell Trust Shares

Filed on November 29, 2023, the judicial order permits the sale or transfer of these trust assets, facilitating liquidation actions to recover funds for creditors and investors. As of late October 2023, the FTX estate’s holdings in Grayscale and Bitwise shares were valued at an estimated $870 million. Recent court filings reveal that the sales process will be conducted in collaboration with a court-sanctioned investment advisor.

The method aims to market and sell the assets professionally, targeting the highest possible returns. The formation of a pricing committee, consisting of various stakeholder representatives, highlights the stringency of the sales operation. According to the court’s mandate, the trust assets may be sold via over-the-counter (OTC) transactions or on trading platforms. Although they have the green light to sell, the debtors are permitted to retain the trust assets based on their “business judgment” evaluations.

Close to 22% of the Last 401 FTX Bankruptcy Docket Entries Are Reassigned Claims

Besides the court’s decision on the trusts, the FTX records overseen by Kroll reveal a considerable volume of claims being reassigned. Around 21.94% of the recent 401 entries in the bankruptcy court’s docket represent the transfer of claims to external entities. Approximately 3.24% of these documents originate from Cherokee Acquisition, a firm specializing in the acquisition of claims in bankruptcy and class action lawsuits, operating through a platform named Claims Market.

From November 1 to November 29, Claims Market facilitated the transactions of 17 FTX claims, ranging from high-value claims exceeding a million dollars to those around $100,000. Presently, the bidding price stands at $0.57 on the dollar, while asking prices hover at $0.61. Besides Claims Market, an array of other specialized companies engaged in purchasing bankruptcy assets are also acquiring FTX claims. According to the Delaware District Bankruptcy Court, the fee for transferring each claim is set at $26.

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