FTX, a bankrupt crypto exchange, has raised concerns after moving $10 million worth of digital assets from the Solana network to Ethereum. This transfer has sparked speculation that it could be the beginning of a series of token dumps as part of the exchange’s bankruptcy proceedings. Blockchain analytics platform Arkham Intelligence has reported that since August 31, FTX’s wallet has transferred $6.23 million worth of Ether (ETH) and over $4 million in altcoins.
The altcoins that were transferred include $1.2 million of FTX Token (FTT), $1.8 million worth of Uniswap (UNI), $1.3 million of HXRO (HXRO), $550,000 worth of SushiSwap (SUSHI), and $260,000 worth of Frontier Token (FRONT). These tokens were all moved to another FTX wallet using the Wormhole Bridge.
The movement of these tokens has raised concerns of potential sell-offs, especially considering FTX’s bankruptcy status. Twitter user Pump House (@pumphouz) tweeted about the FTX wallets being on the move and highlighted the significant amount of Solana (SOL), SPL tokens, and Wrapped Bitcoin (BTC) involved. The tweet suggested that FTX might be preparing for potential token sell-offs.
It is important to note that on August 24, FTX proposed a plan to appoint Mike Novogratz’s Galaxy Digital Capital Management as the investment manager to oversee the sale and management of its recovered crypto holdings. According to the plan, the FTX estate would be limited to selling $100 million of tokens per week, with the possibility of raising the limit to $200 million on an individual token basis. These limits aim to minimize the impact of token sales while ensuring creditors are compensated.
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In addition to this plan, FTX also filed a separate motion to hedge its larger holdings of Bitcoin and Ether. While these proposals are not yet legally binding, the FTX token sales case is expected to be heard in the Delaware Bankruptcy Court on September 13.
Previously, FTX revealed that it had recovered approximately $7.3 billion in liquid assets, with $4.8 billion of that sum comprising recovered assets as of November 2022. Documents raised in an April 12 hearing showed that FTX held $4.3 billion in crypto assets available for stakeholder recovery at market prices as of that date.
As part of its reorganization plan, FTX is considering a reboot of its cryptocurrency exchange. CEO John Ray III stated that the company has started soliciting interested parties for the reboot of the FTX.com exchange. The launch of the new exchange is expected to be completed in the second quarter of 2024, according to FTX lawyers.
The moves made by FTX’s wallet, transferring assets from the Solana network to Ethereum, have raised concerns about potential token dumps. Considering the exchange’s bankruptcy proceedings, these transfers could be a strategic move to prepare for upcoming token sell-offs. The outcome of FTX’s token sales case in court will shed more light on the future of the exchange and its impact on the crypto market.
