Embattled Crypto Exchange FTX Hires Billionaire Mike Novogratz’s Galaxy Digital To Manage Recovered Crypto
Troubled crypto exchange FTX is hiring a prominent crypto asset management firm to handle its recovered digital assets.
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.
“The Debtors seek authorization for FTX Trading Ltd. to enter into an Investment Services Agreement with Galaxy Digital Capital Management and to perform its obligations thereunder.
The Debtors selected Galaxy Asset Management as an investment adviser based on their sophistication and qualifications, which are set forth in more detail in the Investment Services Agreement Motion and the Kurz Declaration (as defined in the Investment Services Agreement Motion)…
In addition, the Debtors have determined that the Investment Services Agreement’s proposed fee structure appropriately reflects the nature of the services to be provided by Galaxy Asset Management and contains reasonable terms and conditions.”
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.
“If the Debtors attempted to sell large digital asset positions directly on an exchange, the Debtors would risk ‘flooding the market’ and depressing the value of such digital assets.”
FTX first filed for bankruptcy in November 2022 after halting customer withdrawals. Its founder and former chief executive, Sam Bankman-Fried, is accused of mishandling billions of dollars worth of customer funds and defrauding investors. If convicted, he faces decades behind bars.
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.
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