FTX files motion for Galaxy Digital to manage recovered crypto holdings
The company filed a motion with the District of Delaware Bankruptcy Court on Aug. 24 seeking authorization and approval of guidelines for the sale of digital assets recovered during ongoing bankruptcy proceedings.
The filing outlines FTX’s requests and plans to transfer some $7 billion worth of recovered cryptocurrency tokens under the management of Galaxy Digital following the collapse of the exchange in 2022.
Related: FTX releases restructuring plan, hints at rebooted offshore exchange
FTX intends to provision for the potential sale of its cryptocurrency holdings and stake tokens through Galaxy Digital as set out in its preliminary statement. The filing notes a “comprehensive management and monetization plan” for its cryptocurrency holdings that intends to reduce exposure to volatility and potential fiat repayments to creditors.
FTX intends to retain Galaxy Digital as a registered investment adviser, tapping into its “specialized knowledge” of digital asset markets to assist the company in maximizing the value of its token portfolio.
The company noted a number of potential benefits of the partnership, including being able to anonymously sell its holdings into the markets and mitigate risk of market manipulation.
FTX notes that the general investment guidelines will see Galaxy Digital sell various FTX-owned digital assets in the future as well as being responsible for hedging Bitcoin (BTC) and Ethereum (ETH) before any potential sales.
FTX will look to sell its crypto holdings for fiat to reduce exposure to market volatility, while taking advantage of liquid hedging markets for Bitcoin and Ethereum to lessen exposure to unexpected price fluctuations before their sale.
Decentralized Finance (DeFi) also cracks a nod in the
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