- FTX is seeking court approval to onboard Galaxy Digital Holdings as an advisor.
- The bankrupt exchange seeks an asset management company to handle crypto holdings.
- Galaxy Digital holds nearly $76 million worth of exposure to FTX.
According to the latest reports, Billionaire Michael Novogratz’s Galaxy Digital Holdings Ltd. has been hired by FTX to help sell crypto holdings. “A comprehensive management and monetization” developed by the bankrupt crypto exchange aims to protect it from market volatility, as well as “prepare for potential dollarized distribution to creditors.”
Bloomberg noted that the regulations allow trading and holding of specific tokens, along with strategies like hedging Bitcoin and Ether, to reduce vulnerability to market fluctuations. Staking, a process where tokens are pledged to support blockchain operations, is also within the scope.
Administrators from FTX have clarified that this collaboration with Galaxy was a decision made after consultation with the official committee of unsecured creditors and consideration of other potential investment advisers.
At the moment, FTX is seeking approval from the court to onboard an investment services agreement with Galaxy Asset Management.
Meanwhile, crypto Twitter is concerned if Galaxy Digital is the correct choice to manage FTX’s holdings since it disclosed almost $76 million worth of balance “stuck on FTX.” According to FTX 2.0 Coalition, Galaxy has most likely withdrawn $76 million in the last few days.
FTX asks court to bring in Galaxy Digital to manage crypto holdings.Galaxy has self-admitted last-minute preference exposure (near $76M). Were they really the only choice?Seeking to do business with someone you have large claims against strikes us as an odd decision. pic.twitter.com/lFXaFOKSde— FTX 2.0 Coalition (@AFTXcreditor) August 24, 2023
According to the court filing, Galaxy Digital has stated,
Galaxy Asset Management has extensive experience in areas relevant to digital asset management and trading, including with respect to the types of transactions and investment objectives contemplated.
On the other hand, on August 22, a notification from Alameda Research, UTXO Management, and Balch & Bingham LLP announced they introduced GrayscaleLitigation.com with the aim to bring together shareholders of Grayscale Bitcoin Trust and Grayscale Ethereum Trust. Additionally, there are plans to form a joining legal process against Grayscale Investments.
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