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The court grants FTX permission to sell cryptocurrency

N.Y. (Reuters) – Insolvent cryptocurrency exchange FTX was granted permission by a US court on Wednesday to sell up its cryptocurrency holdings, a move that, according to the business, would let it pay clients in US dollars and reduce the risk of price volatility in the cryptocurrency markets.


At a court hearing in Wilmington, Delaware, U.S. Bankruptcy Judge John Dorsey granted FTX’s request, permitting FTX to sell up to $100 million worth of cryptocurrency each week and enter into hedging and staking contracts that will enable FTX to reduce the risk of price volatility and generate passive income on more widely used crypto assets like bitcoin and ether.


The formal committee chosen to represent FTX’s consumers in the bankruptcy and an ad hoc committee that represents non-U.S. clients with deposits on’s foreign exchange endorsed FTX’s proposal.

Dorsey overruled two FTX customers who had expressed worries during the hearing that FTX sales might lead to a decline in cryptocurrency prices and that FTX might not actually own all of the cryptocurrency it has in its accounts.


In court documents, FTX claimed that it was well aware of the possibility that their attempt to sell coins may affect the cryptocurrency markets. It said that one of the reasons it recruited American cryptocurrency company Galaxy as an investment advisor was to reduce the danger that “information leakage” might trigger short-selling activity and precipitous drops in the price of cryptocurrencies. According to FTX’s court documents, maintaining its present crypto portfolio comes with risks that might force the company to hold some assets even if their prices fall.


If both creditors committees concur, Dorsey permits FTX to speed up the liquidation process by up to $200 million per week.


In a court document filed on Monday, FTX claimed to control $3.4 billion worth of cryptocurrencies, including $560 million in bitcoin, $192 million in ether, and $1.16 billion in Solana. Following allegations that it mishandled and misplaced client cryptocurrency deposits totaling billions of dollars, FTX declared bankruptcy in November 2022. Consumers have received more than $7 billion in assets back from FTX, and the company is still pursuing additional recoveries through legal action against FTX insiders and other defendants who received money from FTX before its bankruptcy.


Sam Bankman-Fried, the creator of FTX, has entered a not-guilty plea to accusations that he deceived FTX clients by using their money to support his own dangerous investments. A number of other former FTX executives have admitted wrongdoing.


(Alexia Garamfalvi and David Gregorio contributed to the editing; Dietrich Knauth reported the story.)


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Dr. William Odion is a financial coach and consultant who specializes in Forex and Crypto trading. He is also an author, founder and CEO of Probaba EA Consults a.k.a Probabafx, and a brand influencer and real estate investor.

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