Wallets linked to bankrupt crypto firms Alameda Research and FTX have transferred over $10 million worth of cryptocurrency to exchange deposit accounts in a span of five hours from October 24 to 25, according to data from blockchain analytics platform Spot On Chain. This sudden movement of funds indicates that the firms may be planning to sell some of their assets in order to repay their creditors.
The data from Spot On Chain reveals that an address believed to belong to FTX transferred 2,904 Ether (ETH), equivalent to over $5 million at the time, to another address at 8:18 pm UTC on October 24. Subsequently, this address sent $3.4 million of the funds to a Binance deposit address and $1.8 million to a Coinbase deposit address. Just thirty-nine minutes later, a wallet associated with Alameda Research transferred $95 worth of tokens, including LINK, MKR, and AAVE, to this same address.
Over the course of the next five hours, FTX and Alameda wallets sent an additional $5 million worth of cryptocurrency to this address, including COMP and RNDR. At around 2:00 am UTC on October 25, this address then sent approximately $2 million worth of LINK, $2 million worth of MKR, and $1 million worth of AAVE to a Binance deposit address. In total, the value of cryptocurrency sent to exchange deposit addresses during this period was $10,362,403.
It is important to note that FTX and Alameda Research are both bankrupt and have had a plan approved by a Delaware Bankruptcy Court to liquidate $3.4 billion worth of crypto assets that they held. This announcement initially raised concerns among market participants that the large-scale liquidation could cause a significant market downturn. However, experts argue that the gradual and phased nature of the liquidation should help mitigate its impact on the overall market.
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The movement of funds to exchange deposit accounts suggests that FTX and Alameda Research are actively working towards fulfilling their obligations to creditors. By selling some of their cryptocurrency assets, they can generate funds to repay their debts. This is a common strategy employed by bankrupt firms in various industries, as it allows them to liquidate their assets and distribute the proceeds to relevant stakeholders.
The cryptocurrency market is known for its volatility, and large-scale sell-offs can potentially impact prices. However, considering the gradual approach taken by FTX and Alameda Research in their liquidation plan, the market may not experience a significant downturn. This phased strategy allows for a more controlled sale of assets, minimizing the potential negative effects on prices.
For now, it remains to be seen how the market will respond to the ongoing liquidation efforts by FTX and Alameda Research. Traders and investors will closely monitor any fluctuations in prices to determine the extent of the impact. Nevertheless, the fact that these bankrupt firms are taking steps to repay their creditors is a positive development in terms of financial accountability and responsibility.
In conclusion, the recent movement of funds by bankrupt crypto firms Alameda Research and FTX to exchange deposit accounts indicates their intention to sell cryptocurrency assets to repay creditors. The gradual and phased nature of their liquidation plan should help minimize any potential negative effects on the market. The cryptocurrency community will closely monitor the impact of these sell-offs in the coming days.
