Assets will be sold off weekly, with special handling for BTC, ETH and “insider-affiliated tokens.”
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The Delaware Bankruptcy Court has approved the sale of FTX digital assets. Judge John Dorsey made the ruling at a hearing on Sept. 13. Major changes were made to the draft order authorizing the sale on the previous day.
FTX will be allowed to sell digital assets, excluding Bitcoin (BTC), Ether (ETH) and “certain insider-affiliated tokens,” in weekly batches through an investment adviser under preestablished guidelines. There will be limits of $50 million for the first week and $100 million in subsequent weeks. There will be an option to increase the limit with prior written approval of the creditors’ committee and ad hoc committee or to raise the limit to $200 million weekly with approval of the court.
Bitcoin, Ether and insider-affiliated tokens can be sold through a separate decision by FTX after 10 days’ notice to the committees and the U.S. trustee. The U.S. trustee is appointed by the United States Department of Justice.
Those sales will also be conducted through an investment adviser. Information about the sales will be subject to professional eyes only and confidentiality restrictions with a redacted version accessible to the public. The sales will be subject to written objection by the committees and the U.S. trustee. In that case, the sales will be delayed until the objections are overcome or the court orders a sale.
FTX Adapts Crypto Sale Plan to Address U.S. Government Concerns
FTX, the bankrupt crypto exchange, is making changes to its proposal for selling billions in crypto assets. Here’s what you need to know:
Keeping It Quiet: FTX aims to avoid advance public notice of… pic.twitter.com/5DQseittzY
— BoKuBu (@atrungbs87) September 13, 2023
The conditions on the latter sales were added in the draft submitted on Sept. 12. They are regarded as cautionary moves to ensure market stability during the influx of FTX assets. Some observers noted, however, that the sales will represent only a small portion of trading volume and may not have a heavy impact. According to a recent shareholder update, FTX has $833 million worth of Bitcoin and Ether.
FTX can enter into hedging arrangements using Bitcoin and Ether with the prior approval of the committees and can use them for staking, according to the guidelines. FTX Token (FTT) cannot be sold without further court authorization.
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