Judge allows FTX to sell its crypto assets including BTC and SOL

A Delaware bankruptcy court judge ruled on Wednesday that cryptocurrency exchange FTX can sell and invest its cryptocurrency holdings to repay creditors.

During a court hearing, Judge John Dorsey said he granted the motion and rejected two objections to the plan, which allows the bankrupt exchange to sell, pledge and hedge its cryptocurrency holdings, which are said to be worth more than $3.4 billion.

A lawyer representing an ad hoc committee of FTX customers supported the plan at the hearing, while a lawyer for the unsecured creditors committee said all parties involved wanted to expedite the process.

“The sooner we start this process, the better,” he said.

FTX filed a document in August seeking permission to engage in these activities, saying that hedging its crypto assets would “allow the Debtor [FTX] to limit potential downside risk prior to selling such Bitcoin or Ethereum,” while “collateralizing certain digital assets” FTX lawyers said in the filing “…will generate low-risk returns on idle digital assets for the benefit of remaining asset managers and ultimately creditors.”

The judge asked FTX officials whether they could determine who deposited the assets.

“[FTX’s] view is that the digital assets we sell are the debtor’s assets,” said a lawyer representing the exchange. Another lawyer said the assets were all in a pool and “cannot be traced back to a single customer.”

The exchange also requested to hire Galaxy Digital’s Mike Novogratz as an advisor.

FTX revealed earlier this week that it holds $1.16 billion worth of solana (SOL) — about 16% of the token’s circulating supply — and about $560 million worth of bitcoin (BTC). The rest of its holdings are made up of lesser-known, illiquid tokens.