Galaxy Digital Eyes Assets From Crypto Fire Sales

10 months ago 2

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Crypto financial services firm Galaxy Digital seeks to boost its balance sheet with assets from distressed crypto companies. Its new focus comes after a mandate to manage FTX’s crypto holdings for creditor repayments swelled its assets under management from $1.7 billion to $5.4 billion.

After the courts permitted it to sell off FTX’s crypto assets, the financial services firm, which has recorded steep losses in recent months, is now eyeing other assets from FTX’s vast real estate and venture capital portfolio. The assets under review include an investment in OpenAI rival Anthropic.

FTX Assets Could Boost Profits of Galaxy Digital

The company could get a significant boost following the FTX crypto mandate, according to Andrew Bond of Rosenblatt Securities.

“It opens them up to win other mandates that will potentially be much more profitable.”

Galaxy r eported a $94 million loss in the third quarter and has struggled to recover from the market crash of 2022. It lost $77 million from the FTX collapse but has successfully invested in other crypto firms like crypto custody specialist Fireblocks and Polygon Labs. Binance declined to acquire distressed FTX assets in November last year.

FTX Digital Assets A Includes Bitcoin and Ethereum

Galaxy is extensively involved in trading and investment banking. It is pursuing a Bitcoin exchange-traded fund in partnership with the CME Group and Invesco. Galaxy also partnered with Deutsche Bank’s DWS Group and Flow Traders, a Dutch market maker, to launch a euro-backed stablecoin.

Crypto Estates Begin to Repay Creditors

Last year’s crypto collapses have resulted in a slew of bankruptcy proceedings. Celsius, the crypto lender that became insolvent through links with an Ethereum derivative token, received permission to start repaying creditors as early as next year.

Bankrupt crypto lender BlockFi could start repaying creditors by year-end, a US judge said in September. Creditors of Mt. Gox, the collapsed Japanese crypto exchange, appear likely to be in line for the same.

Binance’s US business was set to acquire the assets of bankrupt crypto broker Voyager Digital in 2023 but decided against it due to regulatory concerns. Voyager has around $649 million to repay creditors.

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