FTX, the crypto exchange that filed for bankruptcy in August 2023, is preparing to sell off some of its digital assets to repay its creditors. The exchange has received court approval to liquidate up to $3.4 billion worth of cryptocurrencies, including Solana, FTT, Aptos, Dogecoin, and others. The sale is expected to start on September 13 and last for several weeks, depending on market conditions and demand.
The liquidation plan has raised concerns among crypto investors and traders, who fear that the massive sell-off could trigger a market crash or a price slump for some of the affected tokens. Solana, which forms the largest portion of FTX’s holdings, has already dropped by more than 6% in the past 24 hours, as some holders anticipate the potential impact of the FTX sale. FTT, the native token of FTX, is also facing uncertainty due to its limited liquidity and market depth.
However, some analysts and experts have argued that the fear of an FTX-spurred crypto crash is overblown and that the actual selling pressure could be much smaller than initially anticipated. FTX has hired Galaxy Digital Capital Management, a leading crypto investment firm, to help with the sale process and to provide staking and hedging services for some of the assets. Galaxy Digital will also advise FTX on how to minimize the market disruption and maximize the recovery value for the creditors.
FTX has also stated that it will not sell all of its crypto assets at once, but rather in batches of up to $100 million or $200 million per week, depending on the market situation and the court’s approval. The exchange will also try to avoid selling during periods of high volatility or low liquidity, and will use various methods such as auctions, over-the-counter deals, or market orders to execute the sales.
In addition to selling its crypto assets, FTX is also pursuing other avenues to recoup funds and assets from various parties involved in its downfall. The exchange has filed lawsuits against several former executives, employees, partners, and customers who allegedly contributed to its insolvency or benefited from its collapse. FTX is also exploring legal actions to recover funds paid to prominent sports figures and LayerZero, a blockchain platform that was supposed to power FTX’s operations.
FTX’s bankruptcy saga is one of the most dramatic and complex events in the history of the crypto industry. It has exposed the risks and challenges faced by crypto exchanges and users in a highly volatile and unregulated market. It has also highlighted the need for more transparency, accountability, and security in the crypto space. As FTX prepares to sell its crypto assets, the market will be watching closely how the sale will affect the prices and sentiments of various tokens and coins.