The FTX crypto exchange, currently in bankruptcy, has initiated a transfer of $10 million in cryptocurrencies from the Solana blockchain to the Ethereum network, raising apprehensions that this could presage future token selloffs in the context of the company’s ongoing bankruptcy case.
Data from blockchain research firm Arkham Intelligence reveals that since August 31, the FTX digital wallet has moved Ether tokens worth $6.23 million, along with alternative cryptocurrencies valued at over $4 million.
Recent Transfers Detailed
Among these, the assets shifted include FTX Tokens worth $1.2 million, Uniswap tokens valued at $1.8 million, HXRO coins worth $1.3 million, SushiSwap tokens amounting to $550,000, and Frontier Tokens (FRONT) worth $260,000. All these assets were funneled into another FTX-owned wallet through the Wormhole Bridge.
On August 24, FTX put forward a proposal to designate Galaxy Digital Capital Management, led by Mike Novogratz, as the investment manager responsible for supervising the liquidation and management of the recovered crypto assets.
Per the proposed roadmap, the FTX bankruptcy estate could liquidate tokens worth up to $100 million weekly. This limit could be increased to $200 million for each token. These caps are designed to moderate the market impact of asset sales while ensuring creditors are compensated.
Upcoming Legal Proceedings and Future Plans
Although these proposals have yet to receive judicial approval, the issue concerning FTX’s token liquidation is slated to be discussed in the Delaware Bankruptcy Court on September 13.
During a court session on April 12, FTX divulged that it had regained about $7.3 billion in easily convertible assets. Of this amount, $4.8 billion had been recovered as of November 2022.
Court documents unveiled in the April hearing indicated that FTX held $4.3 billion in digital assets, available at market rates, for stakeholder recovery as of that date.
FTX’s restructuring strategy includes a potential relaunch of its crypto trading platform. John Ray III, FTX’s CEO, indicated that the firm has “started inviting potential stakeholders to participate in the relaunch of the FTX.com exchange.”
Legal representatives for FTX anticipate the revamped exchange to be fully operational by the second quarter of 2024.
