If Approved On Wednesday, FTX Plans To Offload Between $100M and $200M Worth Of Crypto Per Week Through Galaxy Digital
Markets are bracing for a possible sell-off, as failed centralized exchange FTX plans to start offloading billions of dollars of digital assets starting this week, pending court approval.
On Aug. 24, FTX filed a motion with the United States District Court for the District of Delaware outlining plans for Galaxy Digital to sell assets on behalf of FTX. The court is expected to decide on the motion on Sept. 13.
If approved, Galaxy Digital would sell up to $200M worth of assets weekly. The limit would be set at $50M for the first week and $100M thereafter, with a provision allowing FTX to file for further weekly increases to $200M for a specific token at the court’s discretion.
According to a court filing, FTX holds over $1.1B worth of SOL, hundreds of millions in BTC and ETH, and major positions in Aptos (APT) and Stargate (STG).
FTX abruptly filed for bankruptcy last November as concerns regarding the solvency of its sister trading firm, Alameda Research, triggered a run on the exchange’s reserves. The catastrophe revealed rampant intermingling of funds between the two firms and extreme mismanagement, with $8.9B in customer funds estimated to be missing as of March.
SOL Drops Ahead Of Verdict
SOL was the worst-performing of the top ten crypto assets over the past week with an 8.1% loss. APT is down 7.8 in the past week, while FTT slumped 6.5% in the past day.
FTX said the sale of its assets is in the best interests of its debtors as it protects them from the “extreme” volatility associated with the crypto markets. “This volatility exposes the digital assets to downward price swings and may limit the debtors from maximizing the value of the estates,” it said.
FTX is also seeking to recover funds paid for celebrity endorsements, with court documents dated from last week showing efforts to claw back millions of dollars paid to former pro basketballer Shaquille O’Neal and tennis star Naomi Osaka, among other athletes and teams.
FTX similarly filed to retrieve a $21M investment in LayerZero Labs.
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