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Crypto exchange FTX gets nod to sell $873M of assets to repay creditors

November 30, 2023 Coin Telegraph

Crypto exchange FTX gets nod to sell 3M of assets to repay creditors

Bitwise

Nearly $700 million of the $873 million trust assets allowed to be sold by FTX comes from Grayscale’s flagship product, the Grayscale Bitcoin Trust, or GBTC.

Bankrupt crypto exchange FTX has been given the green light to sell around $873 million of trust assets, with proceeds used to repay creditors impacted by the exchange’s collapse in 2022, according to a Nov. 29 filing in a Delaware bankruptcy court.

The $873 million in assets will be sourced from FTX’s stakes in various trusts issued by crypto asset manager Grayscale Investments, valued at $807 million, and custody service provider Bitwise — valued at $66 million.

While the court document references a total of $744 million in assets — this is due to the valuation figure being as of Oct. 25, 2023. The assets have increased in value since.

*Order authorizing FTX Trading to sell trust assets. Source: Kroll*

The approval comes nearly four weeks after FTX debtors filed a motion to Judge John Dorsey on Nov. 3 requesting the sale of the six cryptocurrency trusts — including the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Bitwise 10 Crypto Index Fund (BITW).

FTX currently owns over 22 million units of GBTC, Grayscale’s flagship Bitcoin product, now worth $691 million, while its 6.3 million shares of ETHE are now worth around $106 million.

Grayscale’s Ethereum Classic Trust (ETCG), Litecoin Trust (LTCN) and Digital Large Cap Trust (GDLC) are the three other trusts that FTX can now sell to recoup funds for impacted FTX customers.

*FTX's shares in Grayscale and Bitwise were worth $744 million as of Oct. 25, but the valued has increased since. Source: Kroll*

FTX’s administrators, headed by John. J Ray III, has been working to recover assets since Sam Bankman-Fried’s former empire collapsed in November 2022.

So far, around $7 billion in assets has been recovered, with nearly half of that coming in the form of cryptocurrencies ($3.4 billion).

In June, FTX’s debtors estimated the total amount of customer assets misappropriated was $8.7 billion.

Meanwhile, Bankman-Fried was convicted on seven fraud-related charges on Nov. 2 and is set to be sentenced on March 28.

He remains in Brooklyn’s Metropolitan Detention Center for the time being, where he recently paid four mackerels in exchange for a haircut.

Magazine: Deposit risk: What do crypto exchanges really do with your money?

12 Companies Keep Close to $700 Million in Ethereum in Treasuries

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US Senator Invests in Bitcoin and Ethereum via Grayscale

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Ark Investment tips $20M into Grayscale Ethereum Trust

May 19, 2021 Coin Telegraph

Ark Investment

Ark’s Q1 SEC report revealed holdings of 639,069 shares in Grayscale's Ethereum Trust, worth more than $20 million.

Cathie Wood's Ark Investment has reported holdings of 639,069 shares in Grayscale's Ethereum Trust for Q1 — currently worth around $20.9 million at today’s prices.

ARK Investment has bought 639,069 shares of the Grayscale Ethereum Trust. pic.twitter.com/ofXD5F7QpA
— Documenting Ethereum (@DocumentEther) May 18, 2021

The news of Ark’s major investment into Ethereum was seen as a bullish sign by Ethereum and DeFi proponents. Mythos Capital founder and Bankless author Ryan Adams emphasized how significant he saw the developments:

“Remember when you told you the institutions would never buy ETH? They keep underestimating this asset. ETH IS MONEY.”

Ether bulls have been growing noticeably more confident recently, with the co-founder of venture capital firm Framework Ventures, Vance Spencer tweeting earlier today:

“There were many times when crypto would not have been strong enough to survive without BTC as the dominant narrative. I no longer believe this is the case. Regime change is coming.”

Cointelegraph reported on May 5 that institutional managers bought $30.2 million worth of Ethereum at the end of April, bringing their total holdings to an all-time high of $13.9 billion.

Despite the excitement around the ETH buy, Ark’s Q1 filing with SEC earlier this month shows the firm's portfolio still heavily leans in Bitcoin’s favor. Ark reported holdings of 8.6 million shares in Grayscale's Bitcoin Trust, worth more than $298 million as of today.

Data from TradingView however shows that Grayscale’s ETH Trust has been much more lucrative compared to Grayscale’s Bitcoin trust in 2021.

The share price of Grayscale's ETH Trust, or ETHE, has increased by 179% this year, up from $11.70 on Jan. 4, to $32.70 as of today. The share price of Grayscale's BTC Trust, or GBTC, has increased by a mere 1.7% in the same time frame, up from $33.80 on Jan. 4, to around $34.38 today. GBTC has been trading at a 15-20% discount to its Bitcoin holdings.

Cathie Wood and Ark Investments don’t share the same environmental concerns as expressed recently by Elon Musk and Tesla.

In a May 17 newsletter published by the firm, Ark questioned how well Elon Musk had done his research on the topic, noting that “Tesla’s decision seems to have been triggered by private equity firm Greenidge’s plans to revive a coal power plant to mine Bitcoin.”

The firm highlighted that Greenidge had clarified not only that its plant is powered by natural gas and feeds the grid but also that it bought carbon credits to offset the emissions:

“In our view, the concerns around Bitcoin’s energy consumption are misguided. Contrary to consensus thinking, we believe the impact of Bitcoin mining could become a net positive to the environment.”

According to news outlet Bazinga on May 18, Ark also recently added another 259,897 Coinbase shares to its holdings via the Ark Innovation ETF and the ARK Next Generation Internet ETF — worth more than $62 million at today’s price of around $241.

Rothschild Investment Corp snaps up quarter of a million shares in Grayscale ETH Trust

April 16, 2021 Coin Telegraph

bitcoin trust

Rothschild Investment Corp, has acquired more than 250,000 shares in Grayscale’s ETH trust, and added 8000 shares to its BTC trust holdings — however the firm holds zero ties to the famed Rothschild family dynasty.

Chicago-based financial institution Rothschild Investment Corp, has acquired 265,302 shares in Grayscale’s ETH trust, according to a filing on April 15 with the United States Securities Commission or SEC.

The firm also added more Grayscale Bitcoin trust shares to its holdings, with the latest SEC filing revealing that it increased its tally from 30,454 in January up to 38,346 this month.

Rothschild Investment has been accumulating GBTC since 2017, and the latest filing shows the firm’s appetite for crypto exposure is not slowing down. Ether proponent Ryan Adams, the founder of crypto investment firm Mythos Capital and Bankless, commented on the latest move noting that “BTC is the gateway drug to ETH.”

BTC is the gateway drug to ETH https://t.co/1w7p66OkOF
— RYAN SΞAN ADAMS - rsa.eth (@RyanSAdams) April 15, 2021

The brokerage firm’s history spans back to 1908, and it has been investing in crypto for a relatively long time when compared to the mass inflow of institutions who have swooped in during the past 12 months. An SEC filing showed that the firm owned $210,000 worth of GBTC in July 2017, when BTC was priced around $2000.

Founding members Monroe Rothschild and brother in-law Samuel Karger reportedly have no relation to the famed Rothschild family dynasty, much to the confusion of the crypto community despite the New York Times publishing an article that clarified the situation in 1995.

Not the Rotschild you think https://t.co/KVUy9u1ETy
— Yann Ranchere (@tek_fin) July 23, 2017

Grayscale is the leading U.S. digital asset manager that offers institutional exposure to crypto, the firm holds roughly 660,000 BTC, which accounts for 3.5% of BTC in circulation.

The firm revealed yesterday that its total assets under management has now reached $50.6 billion, its ETH trust, or ETHE, is now up to more than $7 billion worth of AUM, with its shares currently trading at around $24. GTBC has surpassed $41 billion in AUM, and shares are trading at around $59.

04/15/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $50.6 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $ZEC $BAT $LINK $MANA $FIL $LPT pic.twitter.com/mldap6VMoK
— Grayscale (@Grayscale) April 15, 2021

Grayscale Ethereum trust