FTX Wallet Transfers $10 Million worth of Crypto Tokens, Major dump Coming?

A wallet affiliated with the insolvent cryptocurrency exchange FTX has initiated the transfer of $10 million in digital assets from the Solana network to Ethereum. This has raised concerns that this may be the initial step in a series of token liquidations amidst the exchange's bankruptcy proceedings.

Data sourced from the blockchain analytics platform Arkham Intelligence reveals that, starting from August 31, the FTX wallet has shifted $6.23 million in Ether (ETH), in addition to more than $4 million in various alternative cryptocurrencies.

These altcoins encompassed $1.2 million in FTX Token (FTT), $1.8 million in Uniswap (UNI), $1.3 million in HXRO (HXRO), $550,000 in SushiSwap (SUSHI), and $260,000 in Frontier Token (FRONT). The transfer was executed by routing these assets to another FTX wallet through the Wormhole Bridge.

On August 24, FTX put forth a proposal to appoint Galaxy Digital Capital Management, headed by Mike Novogratz, as the investment manager tasked with overseeing the sale and management of the cryptocurrency holdings recovered during the bankruptcy proceedings.

The plan outlines that the FTX estate would initially have permission to sell up to $100 million worth of tokens per week. However, it specifies that this limit could potentially be increased to $200 million on a per-token basis. These restrictions have been put in place to mitigate the impact of token sales while ensuring that FTX can fulfil its obligations to creditors.

In addition to this proposal, the exchange also submitted a separate motion to hedge its larger holdings of Bitcoin (BTC) and Ether (ETH). While these proposals are currently not legally binding, the matter of FTX token sales is scheduled to be presented before the Delaware Bankruptcy Court on September 13.

During an April 12 hearing, FTX revealed that it had successfully recovered approximately $7.3 billion in liquid assets, with $4.8 billion of this total being assets retrieved as of November 2022.

Documents presented in the hearing indicated that FTX held a total of $4.3 billion in cryptocurrency assets available for distribution to stakeholders at prevailing market prices as of April 12.

The current reorganization plan for FTX includes the possibility of relaunching the cryptocurrency exchange. FTX's CEO, John Ray III, stated that the company had initiated the process of engaging with interested parties for the relaunch of the FTX.com exchange.

FTX's legal team anticipates that the launch of the new exchange will be completed sometime in the second quarter of 2024.