FTX Seeks Approval for $3.4 Billion Crypto Asset Liquidation
FTX, the bankrupt cryptocurrency exchange, will appear in Delaware Bankruptcy Court to seek approval for the liquidation of $3.4 billion in Bitcoin and crypto assets. Market analysts and participants are concerned that this sale could add selling pressure to an already struggling market.
What to Expect from the Sale
FTX has proposed a plan to appoint Galaxy Digital as the investment manager responsible for overseeing the sale and management of the recovered assets. The plan suggests a weekly limit of $100 million worth of tokens to be sold, with the possibility of increasing the limit to $200 million for individual tokens. The proposals will be reviewed by the Delaware Bankruptcy Court.
The Reality of the Situation
Contrary to fears, it is unlikely that the coins will be sold en masse on the open market. There will be a proposed limit per week, and most coins are expected to be sold Over-The-Counter (OTC) or gradually via market makers. Additionally, FTX’s SOL holdings are locked and won’t be fully vested until 2025 or later, and FTT tokens may not attract buyers due to their devalued asset status.
The Sales Process and Timeline
Even if the court grants approval, the actual sale won’t start immediately. Regulatory bodies like the SEC and CFTC will oversee the sales, ensuring compliance with laws and regulations. An underwriter will manage the liquidation process, which is expected to take several months.
Don’t Succumb to Panic and Misinformation
While there will be some sell pressure, a sudden and massive sell-off is illegal and unlikely. Bitcoin and crypto market participants are advised to stay informed and avoid succumbing to fear, uncertainty, and misinformation surrounding the event.
Hot Take: Rumors Cause SOL Price to Drop
As a result of the rumors, the SOL price dropped by over 7% yesterday. The Bitcoin price also saw a slight downward movement, trading at $25,859 at press time.
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