FTX Sells Crypto Assets Amid Market Boom, Potentially Halting Rally
FTX, the embattled crypto exchange, recently liquidated millions worth of its crypto assets to expedite the bankruptcy liquidation process. The selloff comes amid the recent crypto market boom as Bitcoin (BTC), Ethereum (ETH), and other top cryptocurrencies registered a significant upswing. However, the massive liquidation escalated the outflows in the market, which could be a catalyst in halting the market rally.
FTX Offloads ETH & JSOL Reserves
According to Peck Shield Alert, an on-chain data tracking avenue, the FTX cold storage address recently transferred 50,000 JPool Staked Solana (JSOL) tokens to an unknown wallet. The transaction was worth nearly $6.6 million. In addition, FTX had shifted 542 ETH, valued at $1.36 million, to Wintermute, a crypto market maker.
Furthermore, in another transaction, Alameda, FTX’s sister crypto trading platform, reportedly registered an internal transfer. The transfer involved the shift of 10,700 ETH, equivalent to $26.8 million, between Alameda’s two wallets. It could have been a stepping stone to offloading ETH reserves held by Alameda.
The latest ETH liquidation by FTX added to the Ethereum outflows for the day amid the crypto’s massive surge past $2,600. However, the selloff wasn’t major enough to halt Ethereum’s gains today as it sustained well above the above-mentioned threshold with over 7% gains in the past 24 hours.
According to Coinglass data, over $44 million worth of long and short positions in Ethereum were liquidated in the last 24 hours, including the FTX sell-off. The liquidation was significant enough, however, it didn’t affect the ETH gaining momentum. On the other hand, the JSOL price surged nearly 10% to $132.06 as it attained new highs despite the FTX dump.
Digital Custody Unit To Be Settled For $500K
FTX has opted to sell Digital Custody Inc (DCI), a subsidiary it acquired previously, at a significantly reduced price compared to its original purchase. Sales on CoinList, a tokenized platform, are set at a maximum of $500k, in stark contrast to the $10 million that the exchange paid for DCI back in August 2022. This strategic move is part of FTX’s ongoing efforts to divest its assets and settle debts following the collapse of Sam Bankman-Fried’s crypto empire.
Furthermore, it’s important to note that the decision to sell DCI was prompted by the bankrupt crypto exchange’s initiative to stem further losses and streamline operational expenses. Moreover, it was determined that integrating DCI into FTX’s operations, particularly for custodial services for FTX.US and LedgerX, was no longer viable. With the collapse of FTX and subsequent sale of LedgerX, DCI became a subsidiary service not accommodated within the defunct programs of the now-bankrupt exchange. However, DCI retains significant value, particularly its segregated accounts license from South Dakota.
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