Table of Contents
Court Greenlights FTX’s Strategic Liquidation Plan to Settle Debts and Refocus
- FTX gains court approval for the sale of assets held in Grayscale and Bitwise trusts, totaling $873 million.
- FTX’s extensive portfolio includes over 32 million shares across various Grayscale trusts, emphasizing the complexity of the approved sale.
- The court-approved sale, aimed at recovering funds for creditors, sees a surge in collective trust asset value from $744 million to $873 million due to recent cryptocurrency value increases.
In the ongoing FTX bankruptcy saga, the court has granted approval for the sale of assets held in Grayscale and Bitwise trusts. The total value of these approved assets stands at a substantial $873 million.
FTX, amidst its bankruptcy proceedings,have shown in a recent report that it possesses more than 32 million shares spread across Grayscale trusts, including GBTC, ETHE, ETCG, LTCN, GDLC, and Bitwise. This diverse portfolio underscores the complexity of the assets involved in the approved sale.
The court-approved sale serves the purpose of recovering funds to address FTX’s outstanding obligations, specifically repaying creditors and exchange customers. Notably, the collective value of these trust assets has surged from $744 million to $873 million, propelled by recent upswings in cryptocurrency values.
Also Read: FTX Files Lawsuit Against Bitget, Aims to ‘Claw Back’ $953M in Assets
Dynamics of Grayscale Trusts and Bitcoin ETF Efforts
Grayscale’s trusts provide a means for investors to access cryptocurrencies without direct ownership of the underlying assets. In the context of the sale, the Grayscale Bitcoin Trust (GBTC) holds particular significance. Additionally, Grayscale maintains substantial holdings of the crypto assets that underpin these trusts.
Examining the historical dynamics, the price of GBTC and other trusts has experienced fluctuations. GBTC, known for trading at a premium over actual Bitcoin, faced a discount in early 2021. Recently, this discount has narrowed to just above 8%.
Grayscale’s efforts over the past two years to establish a Bitcoin spot ETF have culminated in a recent court victory over the SEC. This victory paves the way for Grayscale’s plan to convert the Bitcoin Trust into a fully-fledged Bitcoin ETF.
Also Read: Bitcoin Remains on Track for $100K by Year-End 2024: Standard Chartered
Competition in Bitcoin ETF Market and Recent Developments
In a competitive move, Swiss digital asset manager Pando Asset AG has submitted an application for a spot Bitcoin ETF. The proposed Pando Asset Spot Bitcoin Trust, with Bank of New York Mellon as the administrator and Coinbase Custody as the custodian, enters the race. This move adds to the ongoing challenge of obtaining SEC approval for a Bitcoin ETF in the U.S.
Recent developments include a court ruling in August against the SEC, mandating a review of Grayscale’s Bitcoin ETF application. Despite this obligation, the SEC has yet to make a decision. A recent meeting between the SEC and Grayscale principals indicates ongoing discussions and potential future developments in the regulatory landscape.
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