Bankrupt FTX Exchange Seeks to Sell Crypto Assets
The bankrupt FTX exchange is scheduled to appear in court on September 13 for a hearing on its motion to sell its crypto assets into fiat currency. The firm filed a motion on August 23 outlining its plan to convert its crypto holdings into fiat in order to repay its creditors. This court hearing could potentially lead to the recovery of up to $3.4 billion for creditors and token holders.
Market observers are closely following the outcome of this hearing, speculating on whether the potential selloff of FTX’s crypto assets will cause downward pressure on markets, particularly for Solana tokens.
FTX’s Holdings and Vesting Agreements
In August 2020, FTX and Alameda purchased SOL tokens from the Solana Foundation. As a result, the bankrupt firm now holds a significant amount of SOL, valued at around $685 million. However, a major portion of these tokens are locked in vesting until 2028, restricting the firm from selling more than $100 to $200 million worth of crypto assets per week.
“I am seeing a lot of wrong information being spread about FTX liquidating their holdings. They can only sell up to $200m a week of assets. SOL is their largest holding but most of their Solana is locked up in vesting and can’t be sold for years.” – Johnny (@CryptoGodJohn)
Despite these vesting restrictions, there are concerns that the potential selloff by FTX could impact the price of SOL tokens in the short term. However, some analysts believe that the impact won’t be as severe as anticipated.
Zanshin Capital founder Alan Schill expressed a bearish sentiment, stating that the situation is not positive for SOL due to the significant amount of “overhead supply” from FTX and other investors. He suggests focusing on new projects in the current market cycle.
Price Impact and Market Behavior
Already, traders have started offloading SOL tokens over the weekend, resulting in a 5.8% price drop with an intraday low of $17.87. FTT, another token associated with FTX, has also seen close to a 9% decrease in price.
At the time of writing, SOL is being traded at $18.18, representing an 11% drop over the past two weeks. This decline in price makes SOL the worst-performing crypto asset in the top 30 cryptocurrencies.
It remains to be seen how the court will decide on FTX’s motion to sell its crypto assets and how this will ultimately impact the crypto market, especially for Solana tokens.
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About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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