Key Points:
- FTX receives approval to sell up to $100 million worth of digital assets weekly to repay creditors.
- The sale plan includes strict oversight and the option to increase the weekly cap to $200 million for certain tokens.
- FTX strategically hedges Bitcoin and Ethereum to minimize market volatility impact during sales.
A Delaware District Judge has recently granted approval for FTX, a crypto exchange in bankruptcy, to execute the sale of up to $100 million worth of digital coins on a weekly basis. This decision is part of a comprehensive plan designed to facilitate the return of funds to the exchange’s creditors.
Delaware District Judge John Dorsey’s decision on September 13th paves the way for FTX, a widely recognized bankrupt crypto exchange, to liquidate a substantial portion of its digital asset holdings. This approval follows a proposal submitted by the debtors in August, outlining the sale of the exchange’s cryptocurrency assets. The primary goal of this move is to navigate the complex financial landscape that FTX currently faces while prioritizing the repayment of its creditors.
This is Alamedas Solana wallet which has the rights to the 26,740,743 staked $SOL from 2025-2028.
This wallets keys will be sold in the FTX liquidation. Not the $SOL which cannot be unlocked until 2025-2028.
As Ive been posting for weeks – FTX/Alameda only hold 7m $SOL and… pic.twitter.com/WeIkCKf2Ek
— MartyParty (@martypartymusic) September 13, 2023
The approved plan includes specific guidelines to ensure a methodical and structured approach to the sale process. A financial advisor will oversee the estate’s sales activities, with a weekly sales cap of $100 million for most tokens. This cap may be adjusted to $200 million on a case-by-case basis. Before selling prominent digital currencies such as Bitcoin (BTC) and Ethereum (ETH), the estate is required to provide a 10-day advance notice to the US Trustee’s office.
In a strategic move, FTX has indicated its intention to hedge against Bitcoin and Ethereum (ETH) to mitigate the potential impact of market volatility on the proceeds generated from the sales. Additionally, the estate retains the option to stake specific tokens, essentially participating in token-based activities that could generate additional income. This approach aims to enhance the returns that can be distributed to the creditors.
@DWFLabs is considering to purchase FTX assets in order to provide creditors the best execution price and mitigate a risk of a huge aggressive selling pressure that could send the market back to 2020’s capitalization
— Andrei Grachev (@ag_dwf) September 13, 2023
Amidst these developments, the tech firm DWF Labs has expressed interest in acquiring FTX’s assets. Andrei Grachev, presumably representing DWF Labs, conveyed via a tweet the firm’s commitment to offering the “best execution price” for these assets. This acquisition is targeted at minimizing the risk of significant market fluctuations that could be triggered by large-scale, aggressive selling. DWF Labs aims to prevent a scenario that could potentially revert the crypto market to its 2020 capitalization levels.
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