U.S. Court Approves FTX's Digital Asset Sale

Get the full picture of the U.S. Court's groundbreaking decision to allow FTX to sell digital assets, including Bitcoin and Ethereum.

Uncover the specific conditions, potential market impact, and what it means for FTX and the broader cryptocurrency ecosystem.

Delaware Bankruptcy Court Greenlights FTX's Cryptocurrency Sales

On September 13th, Judge John Dorsey of the U.S. Delaware Bankruptcy Court approved FTX's sale of digital assets.

This ruling came a day after some amendments were made to the draft that would authorize the sale.

FTX is permitted to sell digital assets through investment advisors every week, following previously established guidelines.

Excluding Bitcoin (BTC), Ethereum (ETH), and "specific insider-related tokens," the company can sell up to $50 million in digital assets for the first week, and up to $100 million for subsequent weeks.

There is an option to increase the cap to $200 million per week, provided that written pre-approval is obtained from the creditors' committee and the special committee, or court approval is granted.

Special Guidelines for BTC, ETH, and Insider-Related Tokens

Bitcoin, Ethereum, and insider-related tokens can be sold by FTX following a separate decision, provided that a 10-day advance notice is given to all committees and trustees.

Information related to the sales will only be accessible to experts and will be subject to confidentiality restrictions.

The general public can only access edited versions. Committees and trustees can also file written objections to the sales.

In such cases, the sales would be postponed until the objections are dismissed or the court orders the sale.

Market Impact and Additional Stipulations

The conditions for the latter sale were added to the draft submitted on September 12th. These are considered cautious measures to ensure market stability during the inflow of FTX assets.

However, some market watchers point out that the sales might not significantly affect the market as they make up a small volume of trades.

According to the latest shareholder update, FTX holds a combined $830 million in Bitcoin and Ethereum.

With prior approval from the committees, FTX can conduct hedging transactions using Bitcoin and Ethereum, and can also use them for staking.

FTX tokens (FTT) cannot be sold without additional court permission.