FTX has gotten the go-ahead to sell stakes in digital trusts managed by Grayscale.
According to recent court filings, a bankruptcy judge has given the cryptocurrency firm permission to begin liquidating its $744 million in stakes held by Grayscale as it tries to repay its creditors and recover lost assets.
Lawyers for FTX had argued that liquidating these assets is crucial to stave off the threat of a potential downturn in their price and enhance the estate value. The company has said it has recovered about $7 billion in assets thus far.
Meanwhile, the legal battles stemming from the collapse of FTX last year continue on a number of fronts. The company’s demise last year led to investors losing at least $11 billion. Founder Sam Bankman-Fried was convicted of fraud and conspiracy earlier this month.
This week saw the news that investors who lost their funds when the company went under have expanded their class action suit to include Major League Baseball (MLB), Formula 1 racing, and Mercedes-Benz Group AG’s racing team.
As noted here earlier this week, the investors argue these entities aided and abetted the fraud orchestrated by FTX, adding to the class-action suit that also includes celebrity promoters such as Tom Brady and Steph Curry.
MLB was the first major sports league to sign a promotional deal with FTX in 2021, with its umpires even wearing the company patch on their sleeves. And Formula 1 and Mercedes-Benz had promotional deals with FTX, with the racing team sporting FTX logos on its cars.
The plaintiffs allege that these partnerships helped promote the sale of unregulated securities through FTX, according to the report.
The celebrities named in the suit have argued in court that the investors’ claims are baseless, as their advertisements and sponsorships did not explicitly encourage individuals to deposit money into FTX accounts. They also contend that they had no involvement in FTX’s misappropriation and mismanagement of funds.
Some have made the argument that Bankman-Fried’s conviction could provide momentum to this class-action lawsuit. Plaintiffs in the case “are going to benefit mightily from the investigative work of the government,” Daniel Richman, a professor at Columbia Law School, told Bloomberg earlier this month.
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