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

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

The Delaware District’s U.S. Bankruptcy Court has granted approval for the FTX estate to sell off its trust assets, including investments in Grayscale and Bitwise shares. This decision comes as the FTX Trading Ltd. record is flooded with the transfer of claims to new holders, highlighting a growing trend among creditors seeking immediate financial gain. Filed on November 29, 2023, the court order allows for the sale or transfer of these assets, providing an opportunity to recover funds for creditors and investors. Additionally, the sales process will be conducted in collaboration with a court-sanctioned investment advisor, ensuring a professional approach to maximize returns. As the FTX estate moves forward with the sale, a significant portion of the recent bankruptcy docket entries comprise the transfer of claims to external entities, indicating a dynamic market for acquiring FTX claims.

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FTX Granted Approval to Sell Trust Shares

The Delaware District’s U.S. Bankruptcy Court has given the green light for the FTX estate to sell its trust assets. This approval, dated November 29, 2023, allows the troubled crypto exchange to dispose of its investments in various funds, including Grayscale and Bitwise shares. This decision is a significant step towards recovering funds for creditors and investors. The FTX estate’s holdings in Grayscale and Bitwise shares were estimated to be worth around $870 million as of late October 2023. The sales process will be carried out in conjunction with a court-sanctioned investment advisor, ensuring that it is conducted professionally and with the aim of achieving the highest possible returns. The formation of a pricing committee, consisting of representatives from different stakeholders, further emphasizes the seriousness and rigor of the sales operation. The court has authorized the sale of the trust assets through over-the-counter (OTC) transactions or trading platforms. However, the debtors have the discretion to retain these assets based on their own business judgment evaluations.

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

In addition to the approval of the trust asset sale, the FTX records overseen by restructuring entity Kroll reveal a significant number of reassigned claims. Approximately 21.94% of the 401 most recent entries in the bankruptcy court’s docket represent the transfer of claims to external entities. Out of these, around 3.24% originate from Cherokee Acquisition, a company specializing in acquiring claims in bankruptcy and class action lawsuits. Cherokee Acquisition operates a platform called Claims Market, which has facilitated the transactions of 17 FTX claims from November 1 to November 29. These claims range from high-value claims exceeding a million dollars to those around $100,000. Currently, the bidding price for these claims is $0.57 on the dollar, while the asking prices are around $0.61. In addition to Claims Market, other companies specializing in purchasing bankruptcy assets have also been acquiring FTX claims. The Delaware District Bankruptcy Court has set a fee of $26 for transferring each claim.

FTX Estate’s Sale of Grayscale and Bitwise Shares

The FTX estate’s sale of Grayscale and Bitwise shares is a significant development in the ongoing bankruptcy proceedings. With approximately $870 million worth of assets, these sales have the potential to generate substantial returns for creditors and investors. To ensure that the sales process is conducted professionally and with the highest possible returns in mind, a court-sanctioned investment advisor will be involved in the process. This advisor will work collaboratively with the FTX estate to determine the best approach for selling the assets. A pricing committee has been formed, consisting of representatives from various stakeholders, to oversee and ensure the fairness of the sales operation. The court has granted permission for the trust assets to be sold through either over-the-counter transactions or trading platforms. However, the debtors have the discretion to retain these assets based on their own business judgment evaluations. This flexibility allows the FTX estate to make informed decisions that align with their overall strategic goals.

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Surging Claim Transfers in FTX Record

The FTX bankruptcy proceedings have seen a significant surge in the transfer of claims. According to the records maintained by restructuring entity Kroll, almost 22% of the most recent 401 docket entries represent reassigned claims. This indicates that creditors are opting to trade their claims for immediate financial gain rather than waiting for the resolution of the bankruptcy proceedings. Cherokee Acquisition, a company specializing in acquiring claims in bankruptcy and class action lawsuits, has played a significant role in these transfers. Operating through their platform, Claims Market, Cherokee Acquisition has facilitated the transactions of 17 FTX claims in November alone. These transactions range from high-value claims exceeding a million dollars to those around $100,000. The bidding price for these claims currently stands at $0.57 on the dollar, while the asking prices are around $0.61. This vibrant claims market demonstrates the interest and demand for FTX claims from various specialized companies. The Delaware District Bankruptcy Court has set a transfer fee of $26 for each claim, providing transparency and consistency in the transfer process.

Conclusion

The recent approval of the FTX estate’s sale of trust assets, including Grayscale and Bitwise shares, marks a significant milestone in the bankruptcy proceedings. This decision opens up opportunities for creditors and investors to recover funds, with an estimated $870 million worth of assets available for sale. The involvement of a court-sanctioned investment advisor and the formation of a pricing committee ensures that the sales process is conducted professionally and with a focus on achieving the highest possible returns. Additionally, the surge in claim transfers highlights the growing interest from creditors in trading their claims for immediate financial gain. Companies like Cherokee Acquisition and their platform Claims Market have facilitated these transactions, providing a marketplace for creditors to sell their claims. The transfer fee set by the Delaware District Bankruptcy Court ensures transparency and consistency in the transfer process. Overall, these developments offer hope for a positive resolution to the FTX bankruptcy, benefiting all stakeholders involved.

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