FTX to hire BitGo to safeguard its assets during bankruptcy
FTX’s bankruptcy proceedings continue, and the company has now asked a judge to allow it to hire BitGo to secure its assets.
Bankrupt crypto exchange FTX has notified a federal judge that it wants to hire BitGo to safeguard the remainder of its digital assets as bankruptcy proceedings play out.
BitGo is a leading institutional custody firm.
The cryptocurrency exchange signed a custodial agreement with BitGo n November 13, a day after someone completed unauthorised transfers draining $372 million worth of assets from the company’s accounts.
FTX and its various affiliates currently seek the consent of the judge overseeing its bankruptcy before moving assets. This latest cryptocurrency news means that FTX wants to ensure the safety of its assets.
The crypto exchange told the court during yesterday’s hearing that it was concerned about theft and cyber threats. Hence, the reason it wants to move its assets to BitGo.
Per the terms of the deal, FTX will pay a $5 million upfront fee to BitGo. The crypto custody firm will also charge FTX a monthly fee equal to the average U.S. dollar value of the digital assets it stores, multiplied by 1.5 basis points.
FTX lawyers revealed in the filing that it would cost the company around $100,000 per month, based on the initial transfer of $740 million worth of assets to BitGo. The crypto exchange added that it would continue to investigate and attempt to recover lost or stolen assets as the bankruptcy proceedings continue.
The FTX lawyers added that recovering funds stolen from the exchange could increase the number of assets in custody. In a message to The Block, co-founder and CEO of Bitgo Mike Belshe said;
“It’s time to get serious about ending the human-created disasters in crypto. When you break down FTX subsidiaries, the ones that used BitGo products are solvent and safe. The ones that didn’t, aren’t.”
Any objection to the custodial services agreement is due by December 7th. The next FTX bankruptcy heading in the United States Bankruptcy Court for the District of Delaware will take place on December 16th.
In an interview with Coinjournal earlier this year, Ben Chan, CTO of BitGo, revealed that the company is focusing on custody this year as they seek to improve and strengthen its position in custodial services.
However, BitGo is also planning to offer other financial services soon, with Chan revealing that the company is interested in decentralised exchange.
