FTX, a cryptocurrency exchange, has filed a motion in bankruptcy court seeking approval to hire Galaxy Digital Capital Management LP (“Galaxy”) as an investment manager. The motion, which was filed on August 23, 2023, states that FTX believes that hiring an experienced external investment manager like Galaxy is advantageous because Galaxy has the expertise to sell significant cryptocurrency positions without flooding the market.
According to the court documents, FTX requests authorization to retain an investment adviser to assist with selling certain coins and tokens over time. The proposed guidelines would allow FTX to sell up to $100 million worth of digital assets per week, with the ability to increase the limit to $200 million temporarily.
The motion also states that FTX will pay Galaxy a monthly management fee of 1% of the value of the assets under management, plus a performance fee of 20% of any profits generated.
The court is expected to rule on FTX’s motion in the coming weeks.
Why is FTX hiring Galaxy Digital?
There are a few reasons why FTX is hiring Galaxy Digital as an investment manager. First, Galaxy has a wealth of experience in the cryptocurrency market. The company was founded in 2018 by Mike Novogratz, a former Goldman Sachs banker, and has since become one of the leading cryptocurrency investment firms. Galaxy has a team of experienced investment professionals who have a deep understanding of the cryptocurrency market and its dynamics.
Second, Galaxy has a strong track record of managing cryptocurrency assets. The company has managed billions of dollars worth of cryptocurrency assets for its clients, and has a proven ability to sell large amounts of cryptocurrency without disrupting the market.
Third, Galaxy is a respected and well-known firm in the cryptocurrency industry. The company’s appointment as FTX’s investment manager would send a positive signal to the market and help to restore confidence in FTX.
What does this mean for FTX?
If the court approves FTX’s motion, the company will be able to hire Galaxy Digital as an investment manager and begin selling its cryptocurrency assets. This would allow FTX to generate much-needed cash and help to restructure its finances.
The hiring of Galaxy Digital would also be a positive sign for FTX’s future. It would show that the company is serious about its restructuring efforts and is committed to building a sustainable business.
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What does this mean for the cryptocurrency market?
The hiring of Galaxy Digital by FTX is a positive development for the cryptocurrency market. It shows that there is still confidence in the market, and that even large cryptocurrency exchanges are willing to invest in the long-term.
The appointment of Galaxy Digital as FTX’s investment manager is also likely to help to stabilize the cryptocurrency market. Galaxy is a well-respected firm with a strong track record, and its appointment would send a positive signal to investors.
Overall, the hiring of Galaxy Digital by FTX is a positive development for the cryptocurrency market. It is a sign of confidence in the market and is likely to help to stabilize the market.
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