Collapsed digital asset exchange FTX was today given the green light to sell billions in crypto assets by the judge overseeing its bankruptcy proceedings.
Judge John Dorsey on Wednesday approved that the defunct crypto brand can now sell $3.4 billion in Solana, Ethereum, Bitcoin, and other assets at the U.S. Bankruptcy Court for the District of Delaware.
The company’s plan for offloading the assets, first outlined in August, will appoint Mike Novogratz’s Galaxy Digital as the investment manager overseeing the sale. According to the plan, FTX will cap its selling at $100 million worth of tokens per week, a limit that could be increased to $200 million on an individual token basis.
Judge Dorsey will allow FTX to raise its weekly maximum if the company gets written authorization from the court. But a footnote on the order clarifies that sales of Bitcoin, Ethereum, stablecoins, and the redemption of stablecoins will not count towards the $100 million weekly limit. Calculation of the limit will also exclude transactions made to bridge tokens from non-native blockchains back to their native networks.
FTX quickly and unexpectedly went bankrupt last November due to alleged criminal mismanagement.
Billions of dollars in customer cash disappeared and now the exchange’s new management now is working to pay back creditors. Selling these assets will help plug the hole, which originally stood at $7 billion.
A Monday court filing showed that FTX owns $1.16 billion in Solana (SOL), $560 million in Bitcoin (BTC), $192 million in Ethereum (ETH), and $137 million in Aptos (APT). The crypto prices in the court document are based on pricing from August 31.
Some $800 million in cash and public equity has already been recovered.
Ex-CEO and co-founder of FTX Sam Bankman-Fried is awaiting a massive criminal trial in October after his crypto behemoth went bust last year.
Feds arrested and hit the fresh-faced ex-Jane Street trader and MIT graduate with 13 criminal charges, including wire fraud, securities fraud, conspiracy to commit bank fraud, and defrauding the Federal Election Commission.