FTX Gets Approval to Sell $873 Million in Assets to Repay Creditor

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Binance to end BUSD support in December; Poloniex to launch withdrawals after $100 million attack; FTX gets approval to sell $873 million in assets to repay creditor

FTX, the bankrupt crypto exchange, has received approval to liquidate approximately $873 million in trust assets as part of its efforts to reimburse creditors affected by the collapse in 2022. 

The permission, granted by the Delaware bankruptcy court on November 29, allows FTX to sell assets, with a significant portion—about $700 million—coming from Grayscale’s flagship product, the Grayscale Bitcoin Trust (GBTC).

The assets slated for sale include FTX’s shares in various trusts, totaling $807 million from Grayscale Investments and an additional $66 million from Bitwise, a crypto custody service provider. Despite the court document indicating a total asset value of $744 million as of October 25, 2023, the assets have appreciated since that date.

The court’s authorization for FTX Trading to sell these trust assets follows a petition filed by FTX debtors nearly four weeks prior, on November 3. The request sought approval for the sale of six cryptocurrency trusts, such as the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index Fund (BITW).

As of now, FTX holds over 22 million units of GBTC, valued at $691 million, and 6.3 million shares of ETHE, valued at approximately $106 million. Additionally, FTX may consider selling other trusts, including Grayscale’s Ethereum Classic Trust (ETCG), Litecoin Trust (LTCN), and Digital Large Cap Trust (GDLC), to recover funds for affected customers.

FTX's shares in Grayscale and Bitwise were worth $744 million as of Oct. 25, but the valued has increased since. Source: Kroll

Will John J.Ray Fix Everything in FTX?

FTX’s directors, led by John J. Ray III, have been actively working to recover assets since the collapse of Sam Bankman-Fried’s empire in November 2022. Approximately $7 billion in assets have been recovered thus far, with almost half of that amount in cryptocurrencies, totaling $3.4 billion.

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Earlier in June, FTX’s debtors estimated that the total embezzled client assets amounted to $8.7 billion. Meanwhile, Bankman-Fried, facing seven fraud-related charges, was convicted on November 2 and is scheduled for sentencing on March 28. Currently held at the Brooklyn Metropolitan Detention Centre, Bankman-Fried recently exchanged four mackerels for a haircut.

Binance to end BUSD support in December

Cryptocurrency exchange Binance announced that it will end support for all BUSD products as of 15 December after Paxos stopped token minting. 

In the announcement made by Binance on 29 November, it was stated that users should withdraw or convert their existing BUSD assets to other assets before 15 December. Binance will disable BUSD withdrawals as of 31 December. At this point, balances will be converted to FDUSD for some users. 

The move showed a new phase of Binance’s termination of services for BUSD. The exchange said it stopped lending services for BUSD in October. In an earlier statement, it was stated that support will be gradually terminated until February 2024. 

SEC First Stopped BUSD then CEO, What is Next: BNB?

The SEC sent a Wells Notice to Paxos in February, stating that BUSD is an unregistered security. The New York Department of Financial Services also ordered Paxos to stop issuing BUSD.

US authorities announced a $4.3 billion settlement with Binance and former CEO Changpeng Zhao

Read more:  SEC Dismisses All Charges Against Ripple Executives

BUSD was among the largest stablecoins by market capitalisation before August. The asset peaked in November 2022 with a market capitalisation of $23.3 billion. The current market value of the asset is $ 1.7 billion, which means a 92 per cent decline in the last year.

Poloniex to launch withdrawals after $100 million attack

Cryptocurrency exchange Poloniex is preparing to resume deposits and withdrawals after the $ 100 million attack on 10 November. 

The exchange said in a statement on X that it will gradually resume deposit and withdrawal services on 30 November at UTC.

Poloniex stated that services will be launched in a phased manner for the security of user funds. In the announcement, the exchange will first launch TRX deposits and withdrawals, followed by cryptocurrency transactions such as BTC, Ether and USDT “in the next two weeks”.

Poloniex emphasised that in addition to the resumption of withdrawals, it is actively working to make new listings in the near future. The exchange also asked all users to use the newly updated deposit addresses.

“Please note that failure to use the updated addresses for deposits will result in the funds not being transferred. We apologise for any inconvenience this may cause and thank you for your understanding.”

In the same announcement, Poloniex also promised to organise an airdrop for users who hold their assets on the exchange. 

The airdrop campaign, developed in partnership with HTX DAO, is expected to be launched in December and the asset balance calculation is expected to start on 1 December. Tron founder Justin Sun previously announced the airdrop on 24 November.

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Binance to end BUSD support in December; Poloniex to launch withdrawals after $100 million attack; FTX gets approval to sell $873 million in assets to repay creditor