In a recent wave of events, a renowned cryptocurrency exchange, FTX, has made significant amendments to its proposed guidelines for liquidating its massive cryptocurrency holdings – a move that came in response to objections raised by the U.S Trustee on their previous filings. The newly revised plan of selling $3.4 billion worth of crypto reserves is slated for review in the Delaware Bankruptcy Court.
FTX seems to take calculated steps by removing the requirement for advanced public notice in their liquidation blueprint to circumvent potential market spikes. There’s a clear worry of cascading sell-offs and further fueling market volatility if word gets out about their incremental sale of assets worth up to $100 million a week. The plan grants permission to the estate to sell up to $100 million in tokens per week, with the provision to bump up this limit to $200 million for particular tokens.
Interestingly, FTX incorporated the U.S Trustee into their plan as a noticed party – despite apparent dissatisfaction with their involvement – possibly as a strategy to minimize further hurdles. This move still awaits a greenlight from the court.
Adding a layer of transparency, FTX has pledged to provide monthly reports of finalized settlements – a measure that may improve oversight. The noticed parties can cite objections that need to be addressed through court orders for the claim process to advance.
Contributing to these developments, Delaware judge John Dorsey endorsed FTX’s plan to proceed with its colossal liquidation of digital assets worth $3.4 billion. This go-ahead marks a significant leap in FTX’s modus operandi to address its debts amid ongoing bankruptcy proceedings.
This $3.4 billion portfolio includes $1.16 billion in Solana (SOL) tokens, $560 million in Bitcoin (BTC), and $119 million in XRP. A proposal was tendered in August, explaining FTX’s technique to auction off its cryptocurrency assets under a financial adviser’s supervision.
Galaxy Digital, led by Mike Novogratz, was appointed the investment manager responsible for overseeing the asset sale. This configuration would allow FTX to step-by-step offload its tokens, under the weekly limit, which may be adaptable for certain tokens as needed.
The endorsement to proceed with the liquidation plan has been received from various parties involved, including an attorney representing the ad hoc committee of FTX customers, aiming to expedite creditors’ repayment process.
Source: Cryptonews
