FTX taps Galaxy to help manage its digital assets.
FTX, a now-defunct crypto exchange, is seeking to appoint U.S. crypto firm Galaxy to help oversee its digital assets.
The request was filed in court on Wednesday, August 23rd. According to court documents, FTX has “developed a comprehensive management and monetization plan” for its digital assets that should reduce exposure to market volatility.
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The former exchange seeks to sign an agreement with Galaxy that would allow the company to stake crypto, which would both work to validate blockchain transactions and earn interest.
Additionally, FTX looks to further minimize the negative impact on the price of the assets. It proposes that Galaxy should be able to hedge both Bitcoin and Ether.
That would “provide a means to lessen the Debtors’ exposure to adverse price movements in Bitcoin and Ether prior to their sale.”
Reportedly, Galaxy was chosen after consulting the official committee of unsecured creditors. Other companies were considered, but according to the filing:
The Debtors selected Galaxy Asset Management as an investment adviser based on their sophistication and qualifications.
Galaxy is a global asset management platform offering a suite of institutional-grade investment vehicles that span active, passive and venture strategies.
The court filing also includes a declaration from Stephen J. Kurz, the Global Head of Asset Management of Galaxy, supporting the motion to authorize the partnership between the two companies.
At the beginning of August, FTX announced a restructuring plan with the lofty goal of possibly relaunching as an offshore entity.
At the time of its collapse in November 2022, FTX exchange owed customers approximately $8.7bn. And the company’s bankruptcy exit strategy left some creditors dissatisfied.
