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FTX Wants to Get Mike Novogratz and His Galaxy Digital to Manage Its Crypto Riches

Thu, 08/24/2023 - 13:54
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Yuri Molchan
FTX now trying to see if it can get Galaxy Digital to oversee what is left of its crypto bags before it is given back to creditors
FTX Wants to Get Mike Novogratz and His Galaxy Digital to Manage Its Crypto Riches
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Bloomberg has reported that the current administrators of the FTX crypto trading platform have a plan to appoint Galaxy Digital crypto bank, which belongs to a prominent figure in the world of stock and crypto investment, Mike Novogratz, to help oversee and manage the crypto assets that remain in the possession of FTX.

Mike Novogratz and his Galaxy wanted by FTX

According to the Bloomberg report, experts running FTX have come up with a plan on "comprehensive management and monetization," whose goal is to prepare the remaining crypto for to be distributed to creditors and reduce the exposure of these crypto assets to market volatility.

As part of the aforementioned plan, certain crypto assets can be sold or staked; besides, it allows for "the hedging of Bitcoin and Ether exposure to mitigate risks from market volatility." As for staking, it allows for making profit from pledging crypto to help sustain a blockchain.

Now, FTX seeks permission from the court to ink an investment services agreement with Mike Novogratz's Galaxy Asset Management; that is part of the aforementioned plan. According to the current FTX administrators, they decided to go for Galaxy after consulting with the official group of unsecured FTX creditors, once other candidates had been considered.

They reckon that a thorough risk management plan will be the best solution for protecting FTX's crypto holdings and to help distribute them equally to creditors.

FTX crashed in early November last year, when its founder and CEO, former crypto billionaire Sam Bankman-Fried, attempted to use customers' funds to bail out his pocket trading firm, Alameda Research, which was going bankrupt.

As reported by U.Today earlier this month, Sam Bankman-Fried received a prison sentence.

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FTX administration plans to reboot itself outside USA

As August began, it was reported that the current administration of FTX planned to relaunch the failed crypto exchange outside of the U.S. and to create a sort of FTX 2.0.

The FTX administration suggested dividing the company's creditors into several tiers, adding that one of them could restart FTX and let it work for all customers — except those in the U.S. They could raise funds for this from third-party investors.

Currently, FTX's creditors are divided into several groups: the "dotcom customers," U.S. customers and claimants of the NFT exchange, unsecured claimants and so on. The first group is claiming to recover their funds from the offshore branch of FTX, while the second one targets their funds invested into FTX based in the U.S.

One of the Dogecoin cofounders, Billy Markus, responded to the news of the FTX relaunch sarcastically, tweeting "Why though?" He has had a highly negative opinion of FTX and SBF since the platform crashed.

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About the author

Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets. 

His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

Currently Yuri is a news writer at U.Today and can be contacted at