In an impressive stride, FTX, despite its ongoing bankruptcy proceedings, successfully received authorization to liquidate its vast cryptocurrency assets, presently valued at over $3.4 billion, in order to compensate its creditors. The consensus derived from the U.S. Bankruptcy Court for the District of Delaware, paves the way for FTX not merely to sell, but also hedge and stake its significant cryptocurrency portfolio.
Judge John Dorsey sanctioned FTX’s appeal during the recent court hearing, regardless of resistance against the proposed solution. The legal representatives of a faction of FTX users openly midst the hearing, supported this proposition. Furthermore, a lawyer from the committee of unsecured creditors stressed the urgency to expedite the resolution. FTX had earlier, in August, approached the court for consent to execute these financial operations.
The idea suggested was that by hedging its cryptocurrency assets, FTX could alleviate the potential losses prior to auctioning off assets such as Bitcoin or Ether. Moreover, staking specific digital currencies would produce minimal risk revenue from these otherwise idle assets, insisted the FTX legal team.
During the hearing, doubts regarding asset ownership surfaced, with the judge seeking specifics about asset ownership within FTX’s cryptocurrency pool. Legal representatives conferred that FTX viewed these digital assets as the debtor’s possession. They also added these assets, pooled together, couldn’t be traced back to any particular customer.
This week, FTX offered insights into the construction of its cryptocurrency possessions. The exchange possesses $1.16 billion in Solana (SOL), accounting for about 16% of the token’s entire distribution. It also holds roughly $560 million in Bitcoin, $192 million in Ethereum, $137 million in APT, $119 million in XRP, $49 million in BIT, and $46 million in STG.
As the FTX trial proceeds, these measures could further elucidate the possible options for the exchange to liquidate its assets for debt repayment. However, FTX has not disclosed which specific assets it plans to trade or invest. This development plays a pivotal role for the exchange and its shareholders, as it provides insights into how the exchange might handle its financial commitments, thus offering them a transparent view of FTX’s fiscal situation. Undeniably, this shines a beacon on FTX’s next moves – it will be fascinating to see how the situation unwinds.
Source: Cryptonews
