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FTX’s Potential $3.4B Liquidation Sparks Crypto Price Concerns
Crypto | Sep 12, 2023
Image: Unsplash/Kanchanara
The crypto market is anticipating a potential sell-off due to the implosion of FTX in 2022 and the subsequent bankruptcy proceedings. The Delaware bankruptcy court is expected to rule on the $3.4 billion asset sale on September 13.
In the wake of recent events surrounding the FTX exchange's collapse, the cryptocurrency market is facing renewed pressure. The once-prominent FTX, which imploded in November 2022, is gearing up to appear in Delaware Bankruptcy Court on September 13.
The exchange seeks approval to liquidate $3.4 billion in Bitcoin and other cryptocurrencies.
See: Trust Fallacy: 75% of Payment Fraud in Crypto is Carried Out by KYC-verified Accounts
This move follows the company's proposal to employ blockchain firm Galaxy Digital to supervise the sale and management of reclaimed user funds.
If sanctioned, FTX could unload up to $100 million of crypto tokens weekly, potentially ramping up to $200 million for specific assets.
As the crypto community awaits the court's verdict, there's growing apprehension that an FTX-driven fire sale might bear a negative impact on already-vulnerable cryptocurrencies, especially those in FTX's possession.
FTX has the following cryptocurrencies in its possession that may be sold:
- Solana (SOL): $685 million in locked Solana tokens.
- FTT: $529 million.
- Bitcoin (BTC): $268 million.
- Ethereum (ETH): $90 million.
- Dogecoin (DOGE): $42 million.
See: Digital Asset Classification vs Wire Fraud: What’s the Most Powerful Law in Crypto Right Now
This impending action has heightened concerns within the crypto community, as such a massive sell-off could further destabilize an already sensitive market. The situation underscores the volatility and unpredictability inherent in the cryptocurrency sector.
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