Mike Novogratz is aiding in FTX liquidation which plans to pay its creditors in cash rather than crypto, according to the latest court bankruptcy filing.
FTX, which declared bankruptcy in November, said in an April filing that it held $3.4 billion in crypto, but it previously said that it wanted to sell those assets and distribute the cash to its creditors. August’s latest filing confirmed that disgraced FTX, led by caretaker CEO John J. Ray III, was commissioning Galaxy to help it “enter into hedging and staking arrangements,” which it believes will help it limit the assets’ loss of value and maximize what can be paid back to creditors.
“Mike Novogratz is aiding in FTX liquidation which plans to pay its creditors in cash rather than crypto”
WEALTH TRAINING COMPANY
The request to hire Galaxy must be approved by the bankruptcy court.
So reading between the lines fraudulent FTX could believe that the bear market in cryptos is over and would rather pay its creditors in cash while taking long positions, which would enable it to gain from any upside.
Other bankrupt crypto companies, like the crypto lender Celsius, have chosen to distribute payments in crypto rather than cash.
“The request to hire Galaxy must be approved by the bankruptcy court”
WEALTH TRAINING COMPANY
Mike Novogratz is aiding in FTX liquidation as an advisor to help sell, stake and hedge its sizable crypto holdings, according to court filings
“The Hash” panel discusses the latest developments and the financial conditions of the defunct exchange as the bankruptcy case is burning as much as $1.5 million every day in legal costs.
FTX is seeking the bankruptcy court’s approval for Galaxy to recover funds lost when the exchange collapsed in November. It would involve the selling, hedging, and staking of digital tokens, and active risk management will help protect the value of its token holdings, the filings said.
“Sales of Digital Assets for cash will limit exposure to market volatility”
– FTX filing
“Sales of Digital Assets for cash will limit exposure to market volatility. Hedging of Bitcoin and Ether — two digital assets for which there is a liquid hedging market — will provide a means to lessen the Debtors’ exposure to adverse price movements in Bitcoin and Ether before their sale,” the filing explained. “Additionally, the Debtors will stake certain of their Digital Assets to generate passive yield.”
Staking entails pledging crypto tokens towards blockchain projects, in return for an interest or yield.
Mike Novogratz’s Galaxy was one of the clients impacted by FTX’s collapse in November when it held $77 million in assets with FTX at the time of the crash.
Mike Novogratz is aiding in FTX liquidation and it could be viewed that the worst for crypto in this bear market might be in the rear mirror
Crypto assets continue to build from their recent low price as the US court clears the path for Bitcoin ETFs.
Don’t you think insiders at FTX knew this, and that is why they are offering cash instead of cryptos?