08-24-2023 icon

FTX Partners with Galaxy to Sell, Stake, and Hedge Its Crypto Billions

By Lucy Adegbe

Bankrupt crypto exchange FTX is seeking to sell, stake, and hedge its sizable crypto holdings, according to court filings made late Wednesday evening. The exchange is also seeking to hire Mike Novogratz’s Galaxy Digital as an advisor to help with the process.

FTX is said to have around $3 billion in crypto assets, which it is now looking to liquidate in a way that minimizes losses to its creditors. The exchange is reportedly considering selling its assets outright, staking them to generate yield, or hedging them against price fluctuations.

The decision to tap Galaxy for help is a sign that FTX is taking its bankruptcy seriously. Galaxy is a well-respected crypto investment firm with a deep understanding of the market. Its involvement is likely to give FTX’s creditors some confidence that the exchange is doing everything it can to maximize the value of its assets.

The move to sell, stake, and hedge its crypto assets is a significant departure from FTX’s previous strategy. The exchange had previously been a vocal proponent of holding crypto assets long-term. However, the recent collapse of the Terra ecosystem has shaken investor confidence in the crypto market, and FTX is now taking a more cautious approach.

It remains to be seen how successful FTX will be in selling, staking, and hedging its crypto assets. The market is still volatile, and there is no guarantee that the exchange will be able to get the best possible price for its assets. However, the decision to tap Galaxy for help is a positive sign, and it suggests that FTX is committed to doing everything it can to protect its creditors.

In addition to the $3 billion in crypto assets, FTX also has around $2 billion in cash and other assets. The exchange is reportedly hoping to use these assets to repay its creditors in full. However, it is possible that some creditors may have to accept losses.

The bankruptcy of FTX was a major blow to the crypto industry. The exchange was one of the largest and most respected crypto exchanges in the world. Its collapse shook investor confidence and could lead to further instability in the market.