Mike Belshe: FTX Asset Distribution to Reshape Crypto Market

Starting January 3, 2025, billions of dollars in cash will begin to be returned to FTX creditors. According to Mike Belshe, the founder of BitGo—one of the most popular crypto wallets—this asset distribution and its broader implications could have a significant impact on the cryptocurrency market.Spoiler: The effect might be positive. 

Mike Belshe (BitGo). Source: YouTube

Fast and Secure FTX Asset Distribution  

Mike Belshe highlighted BitGo's role in the FTX bankruptcy process, commending the team for managing it efficiently and comparing it favorably to the drawn-out resolution of Mt. Gox’s collapse.

Kudos to the FTX team for figuring out how to move swiftly

he said, adding that BitGo has been safeguarding FTX’s assets from the beginning of the proceedings.

As a leading digital asset custody provider, BitGo will oversee the distribution of billions of dollars in cash to creditors, including clients who have been waiting years for their funds. 

In mid-December 2024, FTX announced that its court-approved Chapter 11 Reorganization Plan would take effect on January 3, 2025. Initial payments will be allocated to convenience classes, a specific ranking of creditors outlined in the plan.

These payments are expected to start within 60 days of the plan taking effect. Separate payment schedules for other creditor classes will be announced at a later date. To ensure smooth execution, FTX has partnered with global custodian BitGo and U.S.-based exchange Kraken, which operates in 190 countries worldwide. 

BitGo has safeguarded FTX’s assets since the beginning of the proceedings. Source: Happy Coin

Market Impact: A Positive Outlook  

Mike Belshe dismissed fears of a negative impact from FTX’s asset distribution on cryptocurrency markets. Unlike the Mt. Gox case, where assets were returned in cryptocurrency, FTX’s payouts will be made in cash.

This should have a positive impact on the market

he explained, noting that cash payments will allow creditors to reenter the crypto space, potentially driving increased demand.

Even if temporary volatility arises, Belshe expressed confidence in the crypto ecosystem’s resilience. 

The market is much bigger than just a few billion dollars

he emphasized, adding that any fluctuations are expected to be short-lived.

The Evolution of Bitcoin ETFs  

Mike Belshe noted the rapid growth of Bitcoin ETFs in 2024, calling them the fastest-growing ETFs in history. This reflects the strong demand for regulated cryptocurrency products.

Bitcoin ETFs allow institutional investors to gain exposure to the market without directly owning Bitcoin. However, Belshe pointed out some of their limitations, such as fixed trading hours and the inability to use the assets as collateral for other financial transactions.

He believes the next step is to provide both institutional and retail investors with tools to interact directly with cryptocurrencies, while ensuring full security and liquidity.

Bitcoin ETFs enable institutional investors to participate in the crypto market without directly purchasing cryptocurrencies. Source: bitfinder.io

Regulatory Clarity — A Critical Factor  

Mike Belshe expressed optimism about the growing support for the crypto industry in Congress, noting the shift from confrontation to collaboration.

Service providers like BitGo can now move forward with a lot more confidence

he said, emphasizing that clear regulations will help attract institutional investors.

Surprisingly, Belshe supported the consistent application of existing regulations to digital assets, effectively backing the viewpoint of crypto skeptic Senator Elizabeth Warren. He identified three main regulatory priorities: anti-money laundering (AML) measures, investor protection, and market structure. 

We already do AML and sanctions controls better than traditional finance

Belshe stated, urging regulators to align their expectations for cryptocurrencies with those applied to other asset classes.

Mike Belshe: AML procedures are mandatory. Source: gate.io

The Global Financial System: A Step into the Future  

BitGo's global expansion is a crucial element of its long-term strategy. The company has established licensed custodians in key regions, including North America, Europe, the Middle East, and Asia. This network is designed to simplify cross-border transactions and unify diverse markets.

Belshe emphasized the potential of a unified global financial system that would enable businesses to transfer funds seamlessly between continents. 

BitGo's own platform, Go Network, serves as an example of this vision, allowing for regional settlements without the need to move funds across borders.

The Road Ahead  

With the resolution of FTX's bankruptcy, the cryptocurrency industry is preparing for what could be its most pivotal year yet. We are witnessing a unique moment where both institutional players and regulators are working together to build a safer and more interoperable financial system.

As Mike Belshe concluded, 

We’re building the connectivity to trade from Asia to Europe to the Middle East to the U.S.

Mike Belshe and the BitGo team. Source: Х

Profile: Mike Belshe  

Position: Co-Founder and CEO of BitGo, Inc.Education: Bachelor’s in Computer Science, California Polytechnic State University  

Professional Experience: Software engineer and technology innovator. Previously, Mike worked as a developer at Microsoft (Internet Explorer) and Google (Chrome). He is also the co-author of the SPDY protocol, which became the foundation for HTTP/2.  

Leadership and Achievements: Mike Belshe co-founded BitGo in 2013, making the company a leader in institutional-grade cryptocurrency custody and security.   

BitGo, Inc. (Headquarters: Palo Alto, California, USA) is a leading provider of institutional-level services for the custody, trading, and management of digital assets.  

The company pioneered the use of multi-signature wallets, setting new standards for cryptocurrency security. BitGo’s solutions are designed for institutional clients, including cryptocurrency exchanges, hedge funds, and financial institutions.  

Key offerings:

• Custody services
• Trading and liquidity
• Portfolio management
• Settlement solutions

BitGo is recognized as a leader in blockchain security and custodial services for digital assets. With over $70 billion in assets under management, the company serves clients worldwide.

Informal corporate meeting at BitGo. Source: glassdoor.co.in