- FTX moves $10M in altcoins from Solana to Ethereum.
- Galaxy Digital tapped for asset management amid bankruptcy.
- FTX faces creditor backlash over sluggish proceedings.
Since August 31st, an FTX-owned cold wallet has executed transfers of nearly $10 million worth of altcoins from Solana to Ethereum, based on on-chain data. Notable tokens such as LINK, SUSHI, LUNA, and YFI were among the assets moved. These transfers were conducted through the Wormhole Bridge, though the exact reasons behind them remain undisclosed.
It remains uncertain whether these transfers are linked to FTX’s ongoing bankruptcy proceedings or its recent request to enlist Galaxy Digital to sell its cryptocurrency assets for fiat currency.
As of the current press time, FTX has not responded to requests for comment.
In parallel developments, FTX recently petitioned a bankruptcy court for permission to engage Galaxy Digital Capital Management as its investment manager for specific digital assets. This request also included authorization to stake certain idle crypto assets to generate passive yield.
Under the proposed arrangement, Galaxy would assume responsibility for managing, trading, and converting FTX’s assets into fiat currency or stablecoins while safeguarding the exchange from exposure to volatile cryptocurrencies. In return, Galaxy would receive a monthly fiduciary fee.
FTX argued that Galaxy’s expertise in selling large cryptocurrency positions without causing market disruption made it a suitable choice. This engagement is intended to support FTX’s restructuring endeavors by monetizing its cryptocurrency holdings.
Furthermore, FTX has filed a separate motion to establish guidelines for managing and selling its digital assets and to enter into hedging agreements involving eligible cryptocurrencies, primarily Bitcoin and Ethereum.
Criticism has arisen from creditors regarding the sluggish pace of FTX’s bankruptcy plan negotiations. At the most recent bankruptcy hearing on August 23rd, FTX’s attorney, Brian Glueckstein, resisted calls for expedited mediation, asserting that the process is on track for conclusion in the second quarter of 2024.
A preliminary plan presented by FTX on July 31st outlined its intention to reimburse customers through a combination of asset liquidation and litigation against insiders. However, tensions have escalated due to FTX’s efforts to locate a buyer for its international exchange, FTX.com, and a perceived lack of transparency regarding incoming bids.
Kris Hansen, the creditors’ committee attorney, also drew attention to the $50 million spent monthly on attorney fees and other expenses, attributable to FTX’s delays in addressing creditor concerns. FTX aims to enhance creditors’ recovery through legal action against its founder, Sam Bankman-Fried, investment firm K5, and the founders of FTX acquisition targets.
This bankruptcy case originated in November 2022, following allegations of FTX misusing and losing billions of dollars in customers’ cryptocurrency deposits.