Bankrupt digital currency trading platform, FTX Derivatives Exchange, may soon offset the balance in the crypto industry with its planned sell-off of altcoins worth $4.6 billion. As revealed by one of the company's attorneys, Andy Dietderich, a total sum of $5 billion in liquid assets have been located, and there are plans to sell off the stated value in nonstrategic altcoin holdings.
Since FTX filed for bankruptcy in November, its current chief executive officer, John Ray III, and its team of liquidators have been exploring various avenues to dig up cash that it can use to pay back the exchange's tons of creditors.
When FTX collapsed, it declared that its creditors number at least 100,000 and could be as high as one million altogether. With a total of about $8 billion owed to these customers, the exchange's current drivers are torn between liquidating every valuable asset the company has at the moment.
As part of the need to gather funds, the firm has requested permission to sell four of its wholly-owned subsidiaries, including FTX Europe and Embed Technologies, among others. With the revelation that it has over $4.6 billion in altcoins that it could sell, fair relief might be near for the exchange's creditors.
Potential market impact
Should FTX be granted permission to liquidate the altcoins as it has planned, the market may react with opposing views to general expectations. While there is a huge certainty that prices will fall, the fact that the bogus sum is a summation of the monetary value of different tokens will largely help cushion the impact of the potential sell-off.
While earlier reports revealed that FTT, the exchange's native token, accounts for the bulk of the assets on the exchange's balance sheet, the coin may record a significant pullback to complement the previous plunges in the price of the coin.
Alex Dovbnya
Denys Serhiichuk
Arman Shirinyan