FTX Makes Changes to Asset Liquidation Plan
Date: 2023-09-13 Author: Dima Zakharov Categories: CRYPTO PAYMENTS, BUSINESS
A New Twist in the FTX Saga
The court-approved liquidation plan for FTX involves the sale or transfer of specific digital assets. The process must adhere to rules that ensure transaction integrity and protect the interests of creditors.
During the liquidation, the company is permitted to sell cryptocurrency weekly, up to a sum of $100 million.
The decision to modify the plan at the eleventh hour appears to be an attempt to reduce the potential impact of such a substantial sell-off on the market. Announcing the liquidation of a large volume of assets could trigger panic, leading to a sharp decline in prices. By avoiding prior public notification, FTX may be seeking to minimize this risk.
The court ruling also allows FTX to enter into hedging agreements post-case resolution. This could provide additional financial protection against the risks associated with a large-scale asset liquidation.
However, such a strategy may raise questions about transparency. The court ruling sanctioning the plan still implies consideration for the interests of all stakeholders.
Which Coins Will Suffer Most from the Sell-off?
The majority of assets slated for liquidation belong to Solana. However, the consequences of the sell-off may be less severe for the token than some market participants anticipate. Most of the FTX and Alameda coins acquired are still locked and will only become fully accessible in 2028.
On the other hand, holders of the exchange's native token, FTT, may not fare as well. Given the limited liquidity and market depth, the liquidation could significantly impact the already vulnerable coin's prices.
FTX's portfolio also includes other popular altcoins, such as Aptos (APT), Dogecoin (DOGE), Polygon (MATIC), and Ripple (XRP). However, their quantities are incomparable to SOL and FTT.
