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FTX Issues Caution on Investment Manager as Bankruptcy Settlement Advances

FTX, the bankrupt exchange striving to settle its obligations to creditors following its 2022 collapse, has issued a cautionary note regarding its authorized investment manager as it proceeds with asset sales.

In a post dated March 1, FTX clarified that the sale of digital assets mandated by the bankruptcy court is exclusively overseen by Galaxy Asset Management, the authorized investment manager.

The exchange warned of unauthorized third parties attempting to solicit bids on behalf of FTX Debtors.

Moreover, FTX emphasized that any sale of locked digital assets would adhere to the existing terms and conditions governing the unlocking schedule.

The exchange has been actively engaged in restructuring efforts and repaying creditors, having recovered assets amounting to $7 billion for this purpose.

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Approval was granted by the United States Bankruptcy Court for the District of Delaware during a hearing on Feb. 22 for the sale of FTX’s stake in Anthropic, an artificial intelligence (AI) firm, valued at over $1 billion.

This decision followed a motion filed by FTX seeking authorization to sell its 7.84% stake in Anthropic, an investment made in April 2022 prior to its bankruptcy filing in November of the same year.

In December 2023, FTX proposed reimbursing claimants based on crypto asset prices at the time of bankruptcy.

While creditors advocated for “in kind” repayments for crypto holdings, Judge John Dorsey ruled in favor of the debtors in a Jan. 31 verdict, citing clarity in the law.

Former FTX CEO Sam Bankman-Fried was convicted on seven charges including wire fraud, securities fraud, and money laundering conspiracy in a criminal trial on Nov. 3, 2023.

His sentencing, scheduled for March 28, carries a maximum penalty of 110 years in prison.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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