FTX Exchange, which is currently going through bankruptcy proceedings, has issued a warning to the public regarding its authorized investment manager. In a post on X social platform on March 1, FTX stated that Galaxy Asset Management is the sole authorized investment manager responsible for overseeing the sale of digital assets by FTX Debtors as mandated by the bankruptcy court. The exchange also mentioned that there have been attempts by non-authorized third parties to solicit bids from buyers on behalf of FTX Debtors.
FTX further clarified that if locked digital assets are sold by the FTX Debtors, the terms and conditions governing the unlocking schedule would still be in effect. The bankrupt exchange has been actively working on restructuring and repaying its creditors in recent months. It has managed to recover a total of $7 billion in assets, which will be used to repay former customers.
Approval was obtained from the United States Bankruptcy Court for the District of Delaware in a hearing on February 22, allowing FTX to sell its stake of over $1 billion in the artificial intelligence firm, Anthropic. This decision came after a motion filed by FTX to sell its 7.84% stake in Anthropic. FTX initially invested around $530 million into the AI startup in April 2022, prior to its collapse and subsequent Chapter 11 bankruptcy filing in November of the same year.
In December 2023, FTX debtors proposed that claimants be reimbursed based on the prices of crypto assets at the time of the bankruptcy. On the other hand, FTX creditors suggested “in kind” repayments for crypto holdings. However, Judge John Dorsey ruled in favor of the debtors in a decision on January 31, stating that the law was unequivocal on the matter.
Former FTX CEO Sam Bankman-Fried was found guilty of seven charges, including wire fraud, wire fraud conspiracy, securities fraud, commodities fraud conspiracy, and money laundering conspiracy, in his criminal trial on November 3, 2023. He is set to be sentenced on March 28, facing a maximum sentence of 110 years in prison.
Given the collapse of FTX, many are questioning the trustworthiness of crypto exchanges.