FTX exchange issues warning on authorized bids and asset sales

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As the bankrupt FTX Derivatives Exchange prepares to settle obligations to creditors affected by its 2022 collapse, it has cautioned the public about its sole authorized investment manager.

FTX said on the X social platform that the sale of Digital Assets by FTX Debtors, mandated by the bankruptcy court, is solely managed by Galaxy Asset Management, the authorized investment manager. Therefore, only offers by Galaxy Asset Management will be accepted for selling or buying solicitations.

The statement made by FTX was to enlighten interested parties, especially institutional buyers who comply with the law. The firm mentioned that some unauthorized third parties have begun attempting to bid on behalf of certain FTX Debtors.

Screenshot of FTX’s announcement on X social platform.   Source: FTX

In addition, FTX explained that in the case where the FTX Debtors sell locked digital assets, the terms and conditions governing the schedule for unlocking the holdings would still stand. The bankrupt exchange has actively worked on restructuring and repaying its creditors in recent months. The platform has recovered assets totaling $7 billion, intending to use them for customer repayments.

FTX obtained approval from the Supreme Bankruptcy Court of the United States District Court for the District of Delaware in a Feb. 22 hearing to sell its stake of over $1 billion in the AI firm Anthropic.

Related: SBF sentencing: Letters highlight efforts to recover FTX funds

This came after a motion filed by FTX to sell its 7.84% Anthropic stake. FTX first invested about $530 million into the AI startup in April 2022, months before it collapsed and filed for Chapter 11 bankruptcy in November of that year.

In December 2023, FTX debtors proposed claimants receive reimbursement based on the prices of crypto assets at the time of bankruptcy: $16,871 for Bitcoin BTC and $1,258 for Ether ETH.

FTX creditors, in turn, proposed “in kind” repayments for crypto holdings. However, Judge John Dorsey sided with the debtors, saying in a Jan. 31 ruling that the law was “very clear” on the matter.

A jury found former CEO, Bankman-Fried guilty of seven charges in his criminal trial on Nov. 3, 2023, including wire fraud, wire fraud conspiracy, securities fraud, commodities fraud conspiracy and money laundering conspiracy. His sentencing is expected on March 28, where he will face a maximum sentence of 110 years in prison.

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