Mike Novogratz’s digital asset management firm Galaxy Digital appears to be managing the remaining crypto assets of bankrupt cryptocurrency exchange FTX.

On August 24, the company submit A motion was filed in the U.S. District Court for the District of Delaware seeking authorization and approval of guidelines for the sale of digital assets recovered in ongoing bankruptcy proceedings.

The document outlines FTX’s request and plans to transfer approximately $7 billion worth of recovered cryptocurrency tokens to Galaxy Digital’s management after the exchange collapses in 2022.

Related: FTX Publishes Reorganization Plan, Hints at Restarting Offshore Exchanges

As stated in its initial statement, FTX intends to prepare for the possible sale of its cryptocurrency assets and equity tokens through Galaxy Digital. The filing noted a “comprehensive management and monetization plan” for its cryptocurrency holdings, aimed at reducing volatility and potential fiat repayment risks to creditors.

FTX intends to retain Galaxy Digital as a registered investment advisor, using its “expert knowledge” of the digital asset market to assist the firm in maximizing the value of its token portfolio.

The firm pointed to a number of potential benefits of the partnership, including the ability to anonymously sell its holdings to the market and reduce the risk of market manipulation.

“Similarly, debtors expect the expertise of investment advisers to be critical in assessing the timing, location and counterparty of a potential transaction.”

FTX noted that general investment guidelines will see Galaxy Digital sell various digital assets owned by FTX in the future and be responsible for hedging Bitcoin (BTC) and Ether (ETH) ahead of any potential sale.

FTX will seek to sell its cryptocurrency holdings for fiat currency to reduce the risk of market volatility, while using the liquidity of Bitcoin and Ether to hedge the market and reduce the risk of unexpected price fluctuations prior to the sale.

FTX’s filing outlines plans to hold and sell some cryptocurrencies through Galaxy Digital. Source: SEC filings.

Decentralized finance was also recognized in the filing, with FTX noting that it intends to stake certain cryptocurrencies to generate passive income under the direction of Galaxy Digital:

“Debtors believe that pledging certain digital assets under the pledge method will benefit the estate and, ultimately, creditors as they generate a low-risk return on their idle digital assets.”

As bankruptcy proceedings continue, FTX recently filed a proposed restructuring plan that hints at relaunching the offshore exchange. This may give creditors the option to receive some of their lost funds, or choose to share in equity, tokens, and other interests when FTX restarts.

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