In a significant development stemming from the aftermath of its tumultuous crash in November 2022, FTX, the Bahamas-based cryptocurrency exchange, has been granted court approval to commence the liquidation of its crypto assets. This move marks a crucial step in the ongoing effort to address the fallout from one of the most notable incidents in the cryptocurrency industry.
The assets slated for liquidation include a substantial amount of cryptocurrencies:
- – Approximately 85% vesting and 15% liquid of SOL (Solana).
- – Half a billion worth of BTC (Bitcoin), all in a liquid state.
- – 200 million ETH (Ethereum), also in a liquid state.
These assets will be gradually sold off, with a weekly limit set at 50 million, as per the court’s approval. Additionally, FTX must provide written notice before initiating each sale, ensuring transparency and adherence to the court’s directives.
FTX has received court approval to sell off its crypto assets.
This includes
A fat billy of SOL (about 85% vesting, 15% liquid)
Half billy of BTC all liquid
200 milly ETH all liquid.
Some other stuff
– Can sell is 50 million per week.
– Must give written notice
= Nothing Burger pic.twitter.com/nz7XVz8KFg
— Lark Davis (@TheCryptoLark) September 14, 2023
The downfall of FTX can be traced back to the tumultuous events of November 2022 when the exchange faced a liquidity crisis primarily triggered by concerns related to the company’s native token, FTT. This crisis was further exacerbated by a report by CoinDesk, which raised questions about leverage and solvency within FTX-affiliated trading firm Alameda Research.
FTX’s crash had far-reaching consequences, causing considerable turmoil in the cryptocurrency market. The market, valued at over $1 trillion at the time, witnessed a substantial loss, with billions of dollars evaporating from its capitalization.
In a bid to salvage the situation, FTX desperately sought bailout funds, with rival exchange Binance initially considering acquiring parts of the beleaguered company. However, Binance ultimately withdrew from the negotiations.
By November 11, 2022, the CEO of FTX stepped down, and the company was forced to file for bankruptcy. In the wake of this announcement, FTX faced another setback when it potentially fell victim to a hack, resulting in the theft of hundreds of millions of dollars’ worth of tokens.
Adding to the complexity of the situation, FTX’s founder and former CEO, Sam Bankman-Fried, found himself in legal trouble. He was arrested in The Bahamas and subsequently extradited to the United States in late December. On January 3, 2023, Bankman-Fried pleaded not guilty to all criminal charges related to the FTX crash.
The court’s approval for the liquidation of FTX’s crypto assets signifies a significant step in resolving the aftermath of one of the most dramatic episodes in the cryptocurrency industry’s history. It remains to be seen how this process will impact the wider crypto landscape and whether it will provide any restitution to affected stakeholders. Read Similar Story
Source: Investopedia
