Insolvent Crypto Exchange FTX’s Solana Wallet Transfers $10 Million in Alternative Cryptocurrencies to Ethereum Network via Wormhole Bridge Over Four Days, Raising Concerns of Increased Token Sell-offs in the Market.
In a submission made the prior month, FTX debtors have put forward a structured approach to cryptocurrency liquidation to mitigate potential market disruption.
The proposal suggests implementing a weekly sales limit of $100 million for most tokens, with the flexibility to raise this ceiling to $200 million on a per-token basis.
Furthermore, the filing delineates specific guidelines for the divestment of particular cryptocurrencies such as Bitcoin and Ether, categorizing them as “insider” assets.
To promote transparency and guard against abrupt market fluctuations, the proposal advises a ten-day advance notification to the Committee and Ad Hoc Committee of creditors before commencing any sales of these assets.
It’s crucial to bear in mind that this submission currently lacks legal binding, but it is scheduled for review by the Delaware Bankruptcy Court on September 13.
FTX Debtors Disclose Cryptocurrency Holdings Valued at $3.4 Billion
In a prior disclosure made in April, FTX debtors unveiled their cryptocurrency holdings totaling $3.4 billion.
While the specific details of holdings in more liquid assets like Bitcoin and Ether remain undisclosed, the estate has chosen to publicly disclose its ownership of relatively illiquid tokens, offering some insight into the overall portfolio’s composition.
In an effort to protect the interests of creditors and maintain a cautious approach to asset management, FTX debtors have plans to enlist the services of a financial advisor to provide guidance for the estate’s token sales.
This strategic approach is designed to mitigate potential negative impacts on token prices, particularly for tokens with limited liquidity.
To hedge against price volatility, FTX debtors are also considering strategies to safeguard their holdings in Bitcoin and Ether.
This prudent move could help ensure more consistent returns from the eventual sale of these assets.
The estate is open to the possibility of staking certain tokens, a decision that could potentially generate additional returns, thereby bolstering the pool of funds accessible to creditors.
Previously, the insolvent cryptocurrency exchange proposed the appointment of Mike Novogratz’s Galaxy Digital Capital Management to oversee the sale and management of its recovered cryptocurrency holdings.
