In a recent development, bankrupt cryptocurrency exchange FTX has enlisted the services of US-based crypto firm Galaxy as an advisor to assist in hedging and selling its crypto holdings, as per court filings submitted on Wednesday.
According to a Reuters report, the filing revealed that the primary objective of Bitcoin (BTC) and Ethereum (ETH) hedging strategies is to mitigate FTX’s exposure to adverse price fluctuations before executing the sale.
By implementing these measures, FTX aims to reduce its exposure to market volatility and potential losses, ultimately ensuring a more favorable environment for the eventual sale of its crypto assets.
FTX Outlines Clear Path To Recovery
Per the report, Galaxy, led by billionaire investor Mike Novogratz, will offer guidance on hedging strategies and support FTX in “staking” its crypto. Staking involves lending crypto to validate blockchain transactions and earning interest on the loaned assets.
Highlighting the expertise of Galaxy Asset Management, the investment advisory arm of Galaxy, the filing emphasized their “extensive experience” in digital asset management and trading.
According to Reuters, this aligns with the types of transactions and investment objectives envisioned for FTX’s ongoing restructuring.
On the flip side, during a recent court hearing in Wilmington, Delaware, FTX attorney Brian Glueckstein stated that the company remains on track to conclude its bankruptcy proceedings in the second quarter of 2024.
This update comes in response to a request for expedited mediation from the court-appointed committee representing FTX’s creditors.
FTX’s collaboration with Galaxy as an advisor marks a significant step in the crypto exchange’s efforts to recover from bankruptcy and effectively manage its crypto assets. By engaging Galaxy’s expertise in hedging and staking, FTX aims to minimize risk and optimize the value of its holdings.
Bankman-Fried Claims Inadequate Conditions In Jail
According to Reuters, Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, has alleged that he is enduring “substandard conditions” in federal jail as he awaits his fraud trial.
Bankman-Fried’s lawyer, Mark Cohen, informed the court that the Metropolitan Detention Center in Brooklyn, where Bankman-Fried is being held, has not provided him with a vegan diet as requested.
Cohen argued that this, along with the jail’s failure to supply necessary medication, particularly Adderall for attention deficit hyperactivity disorder (ADHD) and Emsam for depression, has impeded Bankman-Fried’s ability to participate in his defense preparations adequately. Cohen claimed that Bankman-Fried is “subsisting on bread and water” due to his adherence to vegan principles.
Following Bankman-Fried’s complaints, U.S. District Judge Lewis Kaplan, who will oversee the trial, ordered the jail to provide Bankman-Fried with his prescribed medications.
Judge Sarah Netburn, who presided over the recent hearing, expressed her intent to address the medication issues with the U.S. Justice Department’s Bureau of Prisons, which operates the facility.
While it is unclear if vegan food is available at the jail, the Bureau of Prisons stated that the facility provides nutritionally adequate meals following national menu requirements.
Bankman-Fried’s case has garnered attention due to the high-profile nature of FTX and the allegations against him. The collapse of FTX and the subsequent legal proceedings have had significant implications for the cryptocurrency industry.
Bankman-Fried’s former romantic partner and colleague, Caroline Ellison, who served as Alameda’s chief executive, is among three former members of his inner circle who have pleaded guilty and agreed to testify against him at trial.
Featured image from iStock, chart from TradingView.com