Bankrupt crypto exchange FTX picks Galaxy to manage its digital assets

(Reuters) – Bankrupt crypto exchange FTX has hired U.S. crypto firm Galaxy as an advisor to help hedge and sell its crypto holdings, according to court filings made late on Wednesday.

Hedging of bitcoin and ether will provide a means to lessen FTX’s exposure to adverse price movements before their sale, the filing said.

Galaxy, owned by billionaire investor Mike Novogratz, will also help “stake” FTX’s crypto, a process where crypto is lent to validate blockchain transactions, earning interest in the process.

“Galaxy Asset Management has extensive experience in areas relevant to digital asset management and trading, including with respect to the types of transactions and investment objectives contemplated,” the filing said, referring to the investment advisory arm of Galaxy.

FTX filed for bankruptcy in November 2022 in the wake of claims that the company misused and lost billions of dollars worth of customers’ crypto deposits.

FTX attorney Brian Glueckstein said on Wednesday at a court hearing in Wilmington, Delaware, that FTX remains on track to conclude its bankruptcy in the second quarter of 2024, resisting a call for expedited mediation from the court-appointed committee that represents FTX creditors.