• Crypto exchange FTX has filed for bankruptcy and is seeking authorization to hire Galaxy Digital to manage its recovered crypto assets.
• FTX was accused of mishandling billions of dollars worth of customer funds and could face decades in prison if convicted.
• The crypto exchange has recovered $7 billion worth of crypto assets, though it owes customers around $8.7 billion.
Embattled Crypto Exchange FTX Files for Bankruptcy
Crypto exchange FTX has filed for bankruptcy after halting customer withdrawals and being accused of mishandling billions of dollars worth of customer funds. The troubled exchange’s founder and former chief executive, Sam Bankman-Fried, faces potential decades in prison if convicted.
FTX Seeks Authorization to Hire Galaxy Digital
In a new court filing, the bankrupt crypto exchange is seeking authorization for billionaire Mike Novogratz’s Galaxy Digital to take over the management of its recovered virtual currencies as a part of its restructuring process. According to the document, FTX itself cannot sell the recovered cryptocurrencies on a crypto exchange as that could risk supply shock, hurting the prices of digital assets.
Recovered Assets Worth $7 Billion
In June, FTX recovered $7 billion worth of crypto assets, though reports at the time indicated that the crypto exchange owes its customers about $8.7 billion.
Galaxy Digital To Manage Recovered Funds
Galaxy Digital Capital Management will be responsible for managing FTX’s recovered funds under an Investment Services Agreement with reasonable terms and conditions regarding their fees structure appropriately reflecting the nature of services provided by them.
Conclusion
FTX’s decision to hire Galaxy Digital shows that it is trying hard to restructure itself after a tumultuous period involving allegations fraud and mismanagement. The company hopes to recover more than what it currently holds in order to pay back its customers fully or partially what they are owed in funds