FTX’s bankruptcy proceedings continue and the company has now asked a judge to hire BitGo to secure its assets.
Bankrupt crypto exchange FTX has informed a federal judge that it wants to hire BitGo to protect the rest of its digital assets during its bankruptcy proceedings.
BitGo is a leading institutional custody company.
The cryptocurrency exchange signed a custody agreement with BitGo on Nov. 13, a day after someone completed unauthorized transfers that saw $372 million in assets drained from the company’s accounts.
FTX and its various affiliates are currently seeking approval from the bankruptcy supervising judge before moving assets. This one latest cryptocurrency news means that FTX wants to ensure the safety of its assets.
During the court session yesterday, the crypto exchange expressed concern about theft and cyber threats. Hence, it wants to move its assets to BitGo.
Under the terms of the deal, FTX will pay a $5 million upfront payment to BitGo. The crypto custody company will also charge FTX a monthly fee equal to the average US 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 about $100,000 per month, based on the initial transfer of $740 million in assets to BitGo. The crypto exchange added that it would continue to investigate and attempt to recover lost or stolen assets as bankruptcy proceedings continue.
The FTX lawyers added that recovering stolen money from the exchange could increase the number of assets in custody. In a message to The Block, Bitgo co-founder and CEO Mike Belshe said;
“It is time to put a serious end to the man-made disasters in crypto. When you break down FTX subsidiaries, those who used BitGo products are solvent and safe. Those who didn’t are not.”
Any objection to the cold-storage agreement must be submitted by 7 December at the latest. The next FTX bankruptcy class in the United States Bankruptcy Court for the District of Delaware is set for December 16.
In a interview with TSTIME Earlier this year, Ben Chan, CTO of BitGo, revealed that the company is focusing on custody this year to improve and strengthen its position in custody.
However, BitGo also plans to offer other financial services soon, with Chan revealing that the company is interested in decentralized exchange.