Bankrupt FTX Gets Court Approval to Liquidate its Cryptocurrency Holdings
Defunct crypto exchange FTX received an approval from the courts to liquidate its funds. The approval was issued earlier this week, when FTX exchange holds around 16% in the form of Solana tokens. The amount is outstanding amount of SOL currency that is estimated to be valued at around $1.16 billion at the current market price.
The court granted the permission to the FTX exchange on September 13th, at the Delaware Bankruptcy room withstanding that FTX can now liquidate its $3.4 worth of cryptocurrency holdings.
Judge John Dorsey made the ruling on the pending approval. Before granting the approval he dismissed objections to the matter that was made against this plan. Furthermore, he remarked that the sooner the new process rolls out the better it is for the defendant.
The request was filed by the defunct exchange in August this year. The filing retained that hedging of the funds will enable the trading platform to limit risks before selling off their Bitcoin and Ethereum holdings.
FTX Lawyers Claim Staking Digital Asset Reserves will Generate Yields
FTX lawyers have retained that staking the digital asset reserves will generate low-risk returns for the FTX creditors. In the meantime, these digital currency holdings are just static. FTX has now received the green light to sell their digital currency holdings.
However, the firm may still not sell-off their Bitcoin and Ethereum reserves among other insider-affiliated tokens. The exchange is likely to proceed with the sell-off in a weekly manner in presence of an investment advisor that ensures compliance with necessary guidelines.
FTX exchange has a weekly limit of collecting $50 million from their digital currency sales. At the same time, the sales limit might be increased in the upcoming weeks if the courts grant an approval on the matter in association with assent from creditors and members of ad hoc committee.
Meanwhile, FTX exchange will be able to sell its Bitcoin and Ether reserves in addition to the insider tokens after a 10-day notice sent to committee and trustees. The members of trustees are appointed by Department of Justice.
Court is going to bring an investment advisor to supervise all sales contracts. All information regarding these sales will remain confidential with only limited details available to the public.
FTX can Trigger Massive Solana Sell-Off
FTX exchange currently holds a massive Solana reserves making up for 16% of its holdings. At the market rate, it is valued at $1.16 billion worth of outstanding supply in SOL. At the same time, the trading platform currently possesses $560 million in Bitcoin and $270 million in Ethereum.
Selling pressure on digital currency market increased during last week, on this account Solana prices reaching $17.50 per unit. However, the token quickly recovered and was once again set at $18.77 with 5% appreciation. The current market cap the currency is set at $7.715 billion.
Analysts believe that Solana is currently undervalued and experts like Michael van de Poppe claimed that FTX will continue to liquidate $200 million in virtual currencies per week that could help ease their liabilities. These changes are likely to increase the coin flow in the spot markets. The token has already been dealing with increase in net flows since last week that can lead to further price changes.
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