While FTX exchange undergoes bankruptcy proceedings, it has hired Mike Novogratz’s Galaxy Digital to sell its crypto holdings.
FTX and its sister company, Alameda Research, have a large chunk of digital assets that need to be liquidated. And the bankruptcy team, under the leadership of John J. Ray III, wants to leverage the experience of Galaxy Digital in the crypto field.
FTX Bankruptcy Team Onboards Galaxy Digital to Hedge And Stake Crypto
According to Reuters, FTX has hired Galaxy Digital as an advisor to reduce the crypto exposure and mitigate the risk of highly volatile price action. Galaxy is expected to hedge the Bitcoin (BTC) and Ethereum (ETH) positions and eventually sell the assets.
Before selling, Galaxy Digital will also stake the assets to earn yield. The court filing mentions:
“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.”
Previously, in January 2023, Alameda lost $72,000 in Aave while trying to move funds to a single multi-sig wallet. The liquidation occurred as they tried to close a borrowed position without paying back the debt. This was one of many other embarrassing on-chain behaviors from the liquidators.
Hence, FTX’s need for the expertise of an experienced digital assets trading firm.
FTX Tries to Clawback Funds to End Bankruptcy Proceedings
Additionally, FTX’s lawyer, Brian Glueckstein, has affirmed that the firm would conclude the bankruptcy proceedings by the second quarter of 2024. Meanwhile, the firm has also been trying to claw back the funds sent as donations by the former CEO Sam Bankman-Fried
On July 20, BeInCrypto reported that FTX is seeking to recover $71.5 million in donations and investments from its philanthropic arm.
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The New York Metropolitan Museum of Art has voluntarily agreed to return $550,000 to the bankrupt firm. Indeed, FTX has warned beneficiaries of legal actions if they do not voluntarily return funds.
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