FTX taps Mike Novogratz's Galaxy Digital to help sell crypto stash

• FTX is looking for help from Galaxy Digital in managing its digital assets, filings show.
• The investment firm would help sell, hedge, and stake FTX's tokens, including bitcoin and ether.

Fallen crypto firm FTX is seeking to bring in billionaire Mike Novogratz's Galaxy Digital to manage its cryptocurrency stockpile, a court filing disclosed on Wednesday.

FTX is seeking the bankruptcy court's approval for Galaxy to recover funds lost when the exchange collapsed in November. It would involve the selling, hedging, and staking of digital tokens, and active risk management will help protect the value of its token holdings, the filings said.

"Sales of Digital Assets for cash will limit exposure to market volatility. Hedging of Bitcoin and Ether — two digital assets for which there is a liquid hedging market — will provide a means to lessen the Debtors' exposure to adverse price movements in Bitcoin and Ether prior to their sale," the filing explained. "Additionally, the Debtors will stake certain of their Digital Assets in order to generate passive yield."

Staking is the act of committing crypto tokens towards blockchain projects, in return for an interest or yield.

Galaxy was chosen through consultation with the official committee of unsecured creditors, though other firms were also considered.

After FTX shocked the crypto community with its sudden downfall last year, the exchange has been led by John Ray III, who took over from Sam Bankman-Fried. A reputed expert in bankruptcy dealings, Ray has been working to recover the $8 billion still owed to former FTX customers.

Among those affected by the crash were Galaxy, which held $77 million in assets with FTX at the time of the crash.

FTX has since redeemed $7 billion in liquid assets and has also pursued the sale of other assets, such as crypto platform LedgerX for $50 million.