Bankrupt crypto exchange FTX has continued to sell off its crypto holdings, stocking up on liquid assets ahead of its planned repayment to creditors.
As of December 2023, advisors sold crypto from the FTX group’s four largest affiliates and almost doubled the entity’s cash reserves to $4.4 billion a from the $2.3 billion in October, Bloomberg reported Saturday, citing Chapter 11 monthly operating reports.
The four largest entities include FTX Trading, Alameda Research, West Realm Shires Inc, and Clifton Bay Investments. West Realm is the holding company of FTX’s U.S.-based entity FTX.US, while Clifton Bay Investments was one of the companies that venture capital arm FTX Ventures spread its fund across, and the only affiliate besides FTX Ventures to have prepared quarterly financial statements.
Since the FTX bankruptcy estate was cleared to sell its crypto holdings last September, wallets tied to FTX have frequently deposited funds to other exchanges, and unstaked hundreds of millions of dollars’ worth of crypto from staking platforms.
Earlier this month, reports emerged that the FTX estate alone may have been responsible for nearly $1 billion worth of outflows from the Grayscale Bitcoin Trust (GBTC) in the first five days of its trading as an ETF.
Around the same time, Alameda Research voluntarily dismissed a lawsuit against GBTC issuer Grayscale over an alleged “improper redemption ban” on shares of the fund – a lawsuit that was filed before GBTC was converted into an exchange-traded fund (ETF).
Although the FTX estate’s efforts to recover value in the form of liquid assets will likely go a long way toward repaying creditors, some of the exchange’s customers are challenging the way their claims are valued.
As things stand, the value of customer funds will be pegged to the value their assets were trading at when FTX filed for Chapter 11 Bankruptcy. The price of Bitcoin is up 150% since that date, currently trading at around $42,200.
