The Delaware Bankruptcy Court has given its nod to the sale of FTX digital assets following a ruling by Judge John Dorsey during a hearing held on September 13. Notable revisions were made to the draft order authorising the sale, which had been discussed the day before.
Under the approved plan, FTX will have the green light to sell digital assets in weekly batches, with a few exceptions. Bitcoin, Ether, and insider-affiliated tokens are excluded from this arrangement. These sales will be conducted through an investment adviser, adhering to pre-established guidelines.
Initially, there will be a cap of $50 million for the first week, subsequently increasing to $100 million in the following weeks. If necessary, the limit can be raised further, either with the prior written approval of the creditors and ad hoc committee or through court approval, allowing for a weekly limit of $200 million.
FTX can decide the sale of Bitcoin, Ether, and insider-affiliated tokens after providing a 10-day notice to the committees and the U.S. trustee. These sales will also be conducted through an investment adviser, with information accessible only to professionals, while a redacted version will be available to the public. The process allows for written objections from the committees and the U.S. trustee, which could delay the sales until objections are resolved, or the court mandates the 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 governing the latter sales were introduced in the draft submitted on September 12, primarily aimed at ensuring market stability during the influx of FTX assets. Yet, some observers have noted that these sales represent only a tiny fraction of the overall trading volume, potentially mitigating their impact. FTX currently holds approximately $833 million worth of Bitcoin and Ether.
The guidelines also grant FTX the ability to engage in hedging arrangements involving Bitcoin and Ether, subject to the approval of the committees, and to use them for staking. Notably, the sale of FTX Tokens remains contingent on further court authorisation.