FTX looks to Galaxy Digital to help manage crypto holdings

Bankrupt exchange FTX is looking to Mike Novogratz’s Galaxy Digital to help manage its crypto holdings. 

In a court filing late Wednesday, FTX sought permission to work with Galaxy Asset Management, which it said would “provide investment manager services with respect to certain digital assets that constitute an account of FTX Trading.”

In April, FTX said it had recovered $7.3 billion in cash and liquid crypto assets. 

The exchange operator, now under the management of John Ray III, noted Galaxy’s extensive experience in the industry, adding that it is “well-qualified and able to provide digital asset management and trading services in a cost-effective, efficient and timely manner.”

In the filing, FTX outlined a list of the services it hopes Galaxy will provide, including buying, selling, swapping, redeeming, managing, staking, holding, exchanging, converting and trading a wide range of financial instruments, including crypto. 

Under the agreement, in addition to reimbursing Galaxy for certain costs, FTX would pay the company both a “hedging fee” and a “liquidation fee.”

Galaxy exposure

Ray took over management of FTX from former CEO Sam Bankman-Fried in November last year, after the exchange collapsed into bankruptcy. 

Many individuals and financial institutions had money tied up in the exchange when it went down. Galaxy itself had exposure of $76.8 million to FTX at the time, according to financial statements.