This news (rumors) has been out there for a while and i feel partly responsible for the recent weakness in the crypto market
FTX Asset Liquidation Incoming?
SBF is behind bars and 2022’s FTX-triggered market crashes are fading into the past like a bad dream, so you might have been sipping zen-like on a matcha latte thinking it was all plain sailing from here.
Well, think again, because the fallout from SBF’s Adderall-addled antics may not be over just yet. Earlier this month it was reported that an FTX wallet shifted around $10 million of tokens in preparation–it was speculated–for selling.
And prior to that, on August 23rd, Galaxy Digital (which is managing FTX’s crypto holdings) filed a motion with the Delaware Bankruptcy Court seeking authorization for plans to sell off FTX’s digital assets as part of bankruptcy proceedings.
That motion is going before the court on September 13th, and if approved, the plan allows for up to $200 million of assets to be sold each week, with total crypto assets available for stakeholder recovery valued, as of April, at $4.3 billion.
The biggest single holding is SOL, although a significant amount of that SOL appears to be locked, in which case it cannot be immediately sold.
Also, as well as selling assets, the plans allow for the hedging of BTC and ETH (through options contracts, for example), and for the staking of assets where possible. And it should also be kept in mind that the purpose is to mitigate market risk and maximize the value of any holdings, which requires avoiding a price crash.
Still though, it’s another disruptive factor in the mix at a time when trading volumes are low, so volatility is possible.