In a decision that caught the attention of the crypto community, cryptocurrency exchange FTX gained permission to move forward with the sale and investment of its cryptocurrency holdings. The authorization was given by the Bankruptcy Court for the District of Delaware, setting a significant precedent in the treatment of digital assets in bankruptcy situations.
At the recent hearing, Judge John Dorsey validated FTX’s request, disregarding two objections that challenged the decision. Now, FTX has carte blanche to maneuver its cryptocurrency assets valued at an impressive figure above $3.4 billion.
The decision to allow FTX to engage in cryptocurrency sales and investment activities was supported by the company’s client committee. Furthermore, the creditors committee highlighted the importance of a quick and efficient process. A highlight of FTX’s request is that the company believes its hedging actions and investment in digital assets would ultimately benefit its creditors. The strategy aims to optimize the value of assets before their eventual sale, generating returns on previously dormant digital assets.
A peculiarity raised during the hearing was the ability to identify who deposited the digital assets. FTX’s perspective is clear: all digital assets in question are property of the company. However, one detail that can cause uproar is that the assets are consolidated, making them indistinguishable by client.
Another revelation made the market’s eyes turn to FTX: the company holds a total of US$ 1.16 billion in solana (SOL) and around US$ 560 million in bitcoin (BTC). In addition to these notable holdings, FTX also owns a number of less liquid and less popular tokens.
To help with its strategy, FTX has expressed interest in hiring Galaxy Digital’s Mike Novogratz as a consultant. It will be interesting to observe the exchange’s next steps in light of this new judicial permission.
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