A U.S. Bankruptcy Court judge in Delaware has approved a proposal that allows the bankrupt exchange to sell, deposit, and hedge its cryptocurrency holdings, valued at over $3.4 billion. The judge, John Dorsey, issued the ruling on Wednesday (September 13th), rejecting two objections in the process.
During the court hearing, a lawyer representing FTX’s special committee expressed support for the plan, while the creditor committee’s lawyer stated that all parties involved wanted to expedite the process. The lawyer stated, “The sooner we can do this, the better.”
FTX had submitted a filing requesting the right to engage in these activities back in August, arguing that safeguarding its cryptocurrency assets would “allow the Debtor [FTX] to limit the risk of price depreciation before selling bitcoin or ether,” and depositing certain digital assets would benefit the assets – and ultimately the creditors – by creating low-risk returns on their idle digital assets, according to FTX’s legal filings.
The judge raised questions about whether FTX officials could identify to whom these assets belonged. “FTX’s position is that the digital assets that we are selling belong to the debtors,” a lawyer representing the exchange explained. Another lawyer stated that all assets were held in a pool and “indistinguishable” from each customer.
The exchange also sought to hire Mike Novogratz of Galaxy Digital as an advisor.
Earlier this week, FTX revealed that it holds $1.16 billion in Solana (SOL) – roughly 16% of the circulating supply of the token – and approximately $560 million in Bitcoin (BTC). The remainder includes less liquid, lesser-known tokens.