Galaxy Sells, Stakes, and Hedges FTX Crypto Billions

Galaxy Sells, Stakes, and Hedges FTX Crypto Billions

The bankrupt cryptocurrency exchange FTX wants to sell, stake, and hedge its large holdings of cryptocurrency. Court documents filed on Wednesday evening showed that the exchange wants to hire Mike Novogratz‘s Galaxy to give advice.

After almost going out of business in November of the year before, FTX wants to pay its debts with fiat currency instead of bitcoin (BTC) or ether (ETH). Still, the exchange wants to keep the value of its crypto holdings, which are worth more than $3 billion, by trading carefully.

Lawyers for FTX wrote in the filing, “By hedging bitcoin and ether, the Debtors [FTX] can reduce the risk of a loss before selling these assets. Also, staking certain digital assets will help the estates and, in the end, creditors by generating low-risk returns on digital assets that would otherwise be sitting idle.

FTX wants to make money off of the interest that comes from its collection of cryptocurrencies in order to have more money to give to customers who are still waiting for their money. The company, which is led by restructuring expert John J. Ray III, is worried that an immediate full sell-off could cause the price to drop sharply, which would help short sellers and other market participants. To deal with this, FTX is asking market experts for help in coming up with ways to reduce these risks, such as putting limits on weekly sales.

The document states that “Galaxy Asset Management possesses extensive experience in managing and trading digital assets, encompassing the types of transactions and investment objectives under consideration.” This statement is about Mike Novogratz’s crypto conglomerate, which includes the SEC-approved investment advisor.

Galaxy Digital (GLXY), which is part of this group, has said before that it had a lot of money tied to FTX during its bankruptcy. The new filings explain how conflicts of interest are handled to make sure that the asset managers act in the best interests of FTX.

In an April filing, the FTX company said it had $3.4 billion worth of major, highly liquid cryptocurrency assets. In July, the company made a new announcement about how it planned to convert cryptocurrencies into cash before sending money to customers. International customers may be able to use a restructured exchange. FTX is not like other bankrupt cryptocurrency companies like Celsius, which have chosen to give away liquid currencies like BTC and ETH.

A Delaware bankruptcy court will decide whether or not to grant the requests made by FTX. Earlier that day, during a hearing, it came out that the company was spending $1.5 million a day on legal fees as it went through the process of closing down. Notably, FTX founder Sam Bankman-Fried pleaded not guilty on Tuesday to new fraud charges related to how he ran the company.


About Ylleza Jashari

Senior student pursuing a degree in Security Studies at Rochester Institute of Technology. In my role as a Content Writer at Walletor, my primary objective is to develop informative content that effectively educates all Walletor users on the most up-to-date insights pertaining to financial transactions, digital wallets, and the broader cryptocurrency industry.