2023-09-13 19:33:04
FTX obtains court approval to sell its cryptocurrencies
The Delaware court has just authorized FTX to liquidate its cryptocurrencies, worth around $3.4 billion as of August 31, when the exchange published the list of all its assets.
According to Messari’s latest calculations, however, these figures would have fallen given the unfavorable conditions of the crypto market. Thus, on August 11, FTX Reportedly Holds $720M in SOL, $353M in BTC, $113M in ETH, and $66M in APT.
Assets held by FTX (blue) and relative selling pressure versus 7-day volume traded (beige)
Ignoring the illiquid tokens held by FTX (FTT, MAPS, SRM, FIDA, MEDIA, etc.) and its stablecoins, the exchange would a priori hold around 1.3 billion dollars in cryptocurrencies. Of course, this amount is likely to vary depending on the day-to-day market.
Last month, the management of FTX had requested that the sale and/or management of its cryptocurrencies be managed by the company Galaxy Digital. According to FTX’s request, it should probably not sell all of its cryptos, or at least not right away, since it mentioned the possibility of staking or swapping certain tokens provided that this contributes to the reimbursement of the injured customers.
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A smooth liquidation
Regardless, if FTX were to sell its cryptocurrencies, the judge in charge of the case decided that it might only do so in increments of $100 million per week so as not to disrupt the market. This limit might, however, be increased up to $200 million over the same period, in which case only one cryptocurrency might be sold at a time.
Concerning SOL, the native token of Solana, the sale of the latter will therefore also be done in such a way as not to disrupt its price too much. According to the latest estimates, FTX would hold 16% of the total supply of SOL tokens, a revelation that created panic within the crypto community. However, the vesting period for SOL tokens owed to FTX will not end until 2027a large part of them are therefore still completely impossible to sell.
Furthermore, in order to proceed with the sale of Bitcoin, Ether or certain tokens, FTX will be required to give 10 days’ notice to the courts.
During the hearing, an FTX lawyer clarified that it was impossible to link each cryptocurrency to each client, and therefore that the amounts owed to each injured customer would be calculated in dollars, before being distributed “ in the form of cash ».
An FTX lawyer also said that “the sooner the better” to start selling the affected cryptocurrencies, with most parties likely looking to speed up the process. It was not specified whether the sale of cryptos would be carried out over-the-counter (OTC) or via the traditional market.
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Source : The Block
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