According to the official document, “[BitGo] will establish and maintain custody accounts on its books for the receipt, safekeeping and maintenance of digital assets, currencies, virtual currencies, tokens, coins or securities held for [FTX]”
FTX filed a motion with the bankruptcy court to allow asset custodian BitGo to safeguard its remaining assets.
The embattled crypto exchange signed a Custodial Services Agreement with BitGo soon after it declared insolvency. As per FTX's court filing, the contract requires FTX to pay a one-time upfront fee of $5M. BitGo will also charge a monthly fee equivalent to a percentage of the prices of FTX’s assets in USD multiplied by 1.5 basis points.
In the words of Mike Belshe, BitGo’s Co-Founder,
“BitGo’s mission is to “deliver trust in digital assets” – and crypto needs that more than ever. By helping in this case, we intend to do our part to restore trust to our industry.”
BitGo also revealed that it has recovered $740M worth of FTX's funds since November 16. These assets are stored in BitGo’s cold wallets in South Dakota. The custody platform estimated November’s fee to be $100K. It noted that the monthly fee will increase as FTX recovers more of its assets.
Mike Belshe accused Sam Bankman-Fried of committing financial frauds that have affected the entire market, adding,
"SBF proved that there is no such thing as a “safe” conflict of interest. Trading, financing, and custody need to be different. BitGo has been advocating that for years, and it’s time to start making it a reality for the good of crypto."
The deadline for raising objections against nominating BitGo as FTX’s custodian is December 7. The court hearing to confirm BitGo's appointment is scheduled for December 16.
