FTX’s Digital Trusts Valued at $873 Million Set for Sale after Court Approval
In the ongoing FTX bankruptcy saga, advisors have obtained court approval to liquidate digital assets held in Grayscale and Bitwise trusts, totaling nearly $873 million in collective value.
FTX, facing collapse, possesses over 32 million shares across five Grayscale trusts (GBTC, ETHE, ETCG, LTCN, GDLC) and the Bitwise 10 Crypto Index Fund. This approval empowers FTX’s bankruptcy advisors to sell these trust shares, aiming to recover funds for creditors, including exchange customers. Initially valued at $744 million on October 25, the recent surge in Bitcoin and Ethereum prices has elevated the total worth.
Notably, Grayscale’s publicly traded trusts offer investors exposure to cryptocurrencies without direct ownership, with the company holding a significant amount of underlying crypto assets. Despite historical fluctuations, Grayscale’s intent to convert its Bitcoin Trust into a formal Bitcoin ETF aligns with ongoing regulatory challenges, as the SEC is yet to approve any such application, despite a court ruling in Grayscale’s favor in August. The SEC’s recent meeting with Grayscale principals indicates continued discussions regarding the potential approval of a Bitcoin ETF.
Clever Robot News Desk 1st December 2023
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