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FTX debtors issue warning regarding the sale of digital assets by unauthorized parties

TL;DR

  • FTX debtors warn against unauthorized asset sales managed exclusively by Galaxy Asset Management.
  • Court-approved plan: selling assets weekly to repay creditors based on crypto values at bankruptcy.
  • FTX approved selling the Anthropic stake, adding $1 billion to repay creditors.

The debtors of the defunct cryptocurrency exchange FTX have taken to social media to warn about the unauthorized sale of digital assets tied to FTX’s bankruptcy. Specifically, they have highlighted the exclusive role of Galaxy Asset Management in handling the sale of these assets. 

Despite this, several unauthorized third parties have been attempting to solicit bids from buyers on behalf of the FTX debtors, as stated in a warning posted on X (formerly Twitter).

Complex contract terms

One crucial aspect the debtors emphasize concerns the intricate terms outlined in the contract governing the unlocking schedule for these digital holdings. It’s underscored that if the FTX debtors sell the locked digital assets, they are still bound by the terms and conditions established in the schedule approved by the United States Bankruptcy Court. 

This clarification ensures transparency and adherence to legal protocols amidst the asset liquidation process.

In September 2023, FTX received approval from the United States Bankruptcy Court to commence the sale of its $3.4 billion in assets under a meticulous plan. This plan was meticulously designed to mitigate any significant impact on the market resulting from the mass sell-off. 

The approved strategy involved selling off assets worth $100 million per week, occasionally extending the cap to $200 million. Notably, creditors are set to be repaid based on the value of their crypto holdings at the time of FTX’s bankruptcy, which occurred on November 11, 2022, when Bitcoin was trading at $16,778.

Finalizing asset liquidation plan

Recent developments indicate progress toward finalizing the asset liquidation plan. BeInCrypto reported in December 2023 that the next step involves submitting the plan to creditors for a final vote. This crucial stage precedes the sought-after final approval from US Bankruptcy Judge John Dorsey. 

As of January 28, FTX had successfully sold approximately $707 million worth of assets over several months, aligning with the structured approach outlined in the court-approved plan.

Approval for anthropic stake sale

In a significant move, FTX received approval to sell its 7.84% stake in the artificial intelligence (AI) company Anthropic. This sale is expected to contribute an additional $1 billion to the $6.4 billion earned from previous asset sales. 

Such developments significantly bolster the likelihood of the estate fully repaying creditors, fostering increased financial stability and confidence in the ongoing bankruptcy proceedings.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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