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.

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Author: Ronaldo Marquez

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