As the financially troubled FTX exchange prepares to settle its debts following its collapse in 2022, it has issued a warning to the public regarding its authorized investment manager. In a post on the social platform X, FTX stated that Galaxy Asset Management is the sole manager responsible for selling digital assets held by FTX Debtors as mandated by the bankruptcy court. The exchange also cautioned against non-authorized third parties attempting to solicit bids on behalf of FTX Debtors.
FTX further clarified that if locked digital assets are sold by the FTX Debtors, the terms and conditions governing the unlocking schedule will remain in effect. In recent months, the bankrupt exchange has been actively working on restructuring and repaying its creditors. It has managed to recover $7 billion in assets, which will be used to repay former customers.
Approval was obtained from the United States Bankruptcy Court for the District of Delaware on February 22 to sell FTX’s stake in the artificial intelligence (AI) firm Anthropic, which is valued at over $1 billion. This decision followed a motion filed by FTX to sell its 7.84% stake in Anthropic. FTX had initially invested $530 million in the AI startup in April 2022, prior to its collapse and subsequent Chapter 11 bankruptcy filing in November of that year.
In December 2023, FTX debtors proposed that claimants be reimbursed based on the prices of crypto assets at the time of the bankruptcy. In response, FTX creditors suggested “in-kind” repayments for crypto holdings. However, Judge John Dorsey ruled in favor of the debtors in a January 31 ruling, stating that the law was clear on the matter.
Former FTX CEO Sam Bankman-Fried was found guilty of seven charges, including wire fraud, securities fraud, and money laundering conspiracy, in his criminal trial on November 3, 2023. His sentencing is scheduled for March 28, where he faces a maximum sentence of 110 years in prison.
Considering the collapse of FTX, many are questioning the trustworthiness of crypto exchanges.