FTX receives a nod to sell select digital assets.
A momentous verdict from the Delaware Bankruptcy Court has permitted the bankrupt crypto exchange FTX to sell its digital assets.
The ruling, handed down by Judge John Dorsey on September 13th, comes with pre-defined guidelines and conditions.
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In the authorization, Judge Dorsey allowed FTX to sell various digital assets, except Bitcoin (BTC), Ether (ETH), and some "insider-affiliated tokens." The sales will happen weekly and follow pre-established guidelines supervised by an investment adviser.
During the initial week, the crypto exchange can sell up to $50 million in these assets. The subsequent weeks allow for sales up to $100 million. These limits can be extended through prior written consent from the creditors' committee and an ad hoc committee or court approval to raise the ceiling to $200 million weekly.
Transactions involving Bitcoin, Ether, and tokens linked to company insiders have been segregated from this directive. The sale of these assets will require a separate notification, a 10-day prior notice to be precise, to the involved committees and the US trustee appointed by the United States Department of Justice.
These sales are to be conducted similarly through an investment adviser. Information regarding these transactions will be available only to authorized personnel, although a redacted version will be available to the general public.
If written objections are raised by either the committees or the US trustee, these sales will be postponed until such complaints are resolved.
It is worth noting that the sale of FTX Token (FTT) will require additional court authorization.
The set of additional conditions was inserted to act as a safeguard to maintain market stability amid the inflow of FTX assets. Although this decision has made waves, the actual impact may be minor since FTX's assets represent only a tiny fraction of the overall trading volume.
The Delaware Bankruptcy Court's decision marks a milestone, enabling FTX to liquidate a considerable array of its digital assets under strict regulations. This verdict addresses various stability concerns and lays down a procedural framework, setting an important legal standard for future cases in the ever-evolving world of digital assets.
In other FTX-related news, Judge Lewis Kaplan has recently denied Sam Bankman-Fried's request for pre-trial release.
