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 Galaxy Digital set to manage the sale of bankrupt FTX’s crypto holdings and facilitate staking of certain tokens to generate passive yield. 
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<div class="cointelegraph"> 
 The company filed a motion with the District of Delaware Bankruptcy Court on Aug. 24 seeking authorization and approval of guidelines for the sale of digital assets recovered during ongoing bankruptcy proceedings. 
 The filing outlines FTX’s requests and plans to transfer some $7 billion worth of&nbsp;recovered cryptocurrency tokens&nbsp;under the management of Galaxy Digital following the collapse of the exchange in 2022. 
 Related:&nbsp;FTX​ releases restructuring plan, hints at rebooted offshore exchange 
 FTX intends to provision for the potential sale of its <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a>currency <a rel="noopener noreferrer nofollow" title="holdings" href="https://thebittimes.com/tag/holdings.html">holdings</a> and stake tokens through Galaxy Digital as set out in its preliminary statement. The filing notes a “comprehensive <a rel="noopener noreferrer nofollow" title="manage" href="https://thebittimes.com/tag/manage.html">manage</a>ment and monetization plan” for its <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a>currency <a rel="noopener noreferrer nofollow" title="holdings" href="https://thebittimes.com/tag/holdings.html">holdings</a> that intends to reduce exposure to volatility and potential fiat repayments to creditors. 
 FTX intends to retain Galaxy Digital as a registered investment adviser, tapping into its “specialized knowledge” of digital asset markets to assist the company in maximizing the value of its token portfolio. 
 The company noted a number of potential benefits of the partnership, including being able to anonymously sell its holdings into the markets and mitigate risk of market manipulation. 
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 “Similarly, the Debtors expect that the Investment Adviser’s expertise will be crucial in assessing 
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 FTX notes that the general investment guidelines will see Galaxy Digital sell various FTX-owned digital assets in the future as well as being responsible for hedging Bitcoin (BTC) and Ethereum (ETH) before any potential sales. 
 FTX will look to sell its crypto holdings for fiat to reduce exposure to market volatility, while taking advantage of liquid hedging markets for Bitcoin and Ethereum to lessen exposure to unexpected price fluctuations before their sale. 
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 <img src="https://cdn.thebittimes.com/images/2023/08/24/8e11e59dd86f4b301c5f6766a2443933.webp"> 
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 FTX's filing outlines plans to stake and sell some of its cryptocurrency holdings through Galaxy Digital. Source: SEC filing. 
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 Decentralized Finance (DeFi) also cracks a nod in the filing, with FTX noting that it intends to stake certain cryptocurrencies to generate passive yield income under the guidance of Galaxy Digital: 
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 “The debtors submit that staking certain digital assets pursuant to the staking method will inure to the benefit of the estate - and, ultimately, creditors - by generating low risk returns on their otherwise idle digital assets.” 
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 Mike Novogratz’ digital asset <a rel="noopener noreferrer nofollow" title="manage" href="https://thebittimes.com/tag/manage.html">manage</a>ment firm Galaxy Digital looks set to <a rel="noopener noreferrer nofollow" title="manage" href="https://thebittimes.com/tag/manage.html">manage</a> the remaining <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a>currency <a rel="noopener noreferrer nofollow" title="holdings" href="https://thebittimes.com/tag/holdings.html">holdings</a> of bankrupt <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a>currency exchange&nbsp;FTX. 
 As bankruptcy proceedings continue, FTX recently filed a proposed restructuring plan that hints at the creation of a rebooted offshore exchange. This could see creditors be given the option to be paid out a portion of their lost funds or opt for a share of equity, tokens and other interests in an FTX reboot. 
 Magazine:&nbsp;Can you trust crypto exchanges after the collapse of FTX? 
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FTX files motion for Galaxy Digital to manage recovered crypto holdings

TheBitTimes

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