In a recent court filing, FTX, the crypto exchange that is currently heading towards bankruptcy, has made a last-minute adjustment to its offer regarding the sale of its Bitcoin and crypto holdings. The move is seen as an effort to address concerns raised by the US Trustee, the bankruptcy arm of the Justice Department.
FTX’s initial offer, which is to be reviewed in a Delaware bankruptcy court today, September 13, aims to liquidate $3.4 billion in Bitcoin and other crypto assets. The market was filled with concerns over the potential impact of such a large sale, fearing it could put significant selling pressure on an already fragile market.
On August 24, FTX proposed to appoint Galaxy Digital, led by Mike Novogratz, as investment manager to oversee the sale and management of these recovered assets. The plan allowed FTX to sell $100 million worth of tokens per week, a limit that could be increased to $200 million depending on individual tokens.
Details of the revised Bitcoin and crypto sales offer
FTX’s revised proposal indicates that the exchange would not be required to release advance public notice of these transactions due to their potential to significantly impact market prices. The decision comes in light of the fact that the mere prospect of a crypto entity selling up to $100 million of assets weekly has already weakened market sentiment.
The US trustee initially opposed FTX’s plan, insisting that any intention to sell key assets such as Bitcoin (BTC) or Ether (ETH) should be widely publicized to prevent others from objecting. To get an opportunity to express. In a settlement, FTX has now agreed to keep the US trustee and committees representing creditors of the exchange privately informed.
As of August 31, FTX’s holdings include $1.16 billion in Solana, $560 million in BTC, $192 million in ETH, $137 million in APT, $120 million in USDT, $119 million in XRP, $49 million in BIT. , STG includes $46 million. $41 million in WBTC and $37 million in WETH.
Notably, a significant portion of FTX’s SOL tokens are locked and will only be fully vested between 2025 and 2028. This means that any sale would involve the buyer taking possession of FTX’s underlying contract, negating the possibility of a sudden massive dump of SOL tokens.
Market reactions and concerns
Famous crypto trader Hasaka expressed concern on X about potential information asymmetry. Hasaka explained that while market makers and OTC buyers may receive important price-change information, retail investors may be left in the dark. He tweeted: “So with the new FTX liquidation proposal they will not issue advanced public notice before starting to liquidate assets, but will let the creditors committee members know. The same committee that has a group of market makers and OTC desk?
While the last-minute changes made by FTX to its liquidation plan appear to be strategic, aimed at minimizing potential market disruptions, they also raise questions about transparency. The court order authorizing the liquidation still suggests that the interests of all stakeholders have been considered. However, the Bitcoin and crypto communities will be keenly watching Judge John Dorsey’s decision in the Delaware courtroom and the subsequent market reactions.
At press time, BTC traded at $26,124.
Featured image from The Conversation, chart from tradingview.com
source: www.newsbtc.com
