The estate managing the bankrupt FTX crypto exchange has reportedly taken control of high-value NFTs worth over $4 million. This news was shared by Conor Grogan, the director at Coinbase, in a tweet on April 26. The list of NFTs includes items from several blue-chip collections such as Bored Ape Yacht Club (BAYC), Azuki, Mutant Ape Yacht Club (MAYC), BEANZ, and Otherdeed. Now, these digital artworks have been transferred to the estate’s multi-signature wallet.
According to the tweet, the transfer occurred three months ago, and a deeper dive by experts reveals the details. These include 32 BAYC, 29 Otherdeed, 7 Azuki, 2 MAYC, 12 BEANZ, 81 Sandbox LANDs, and 6 Hape Prime NFTs. The latter were bought by Alameda Research for $100,000, according to Grogan.
Most of these NFTs were purchased by FTX back in 2021 when the NFT market was experiencing a significant rally, and the exchange tried to establish its own NFT marketplace. As such, FTX reportedly spent over $24 million to snap up 101 Bored Apes, which were then transferred to its US subsidiary and listed for a lower price to attract buyers from established marketplaces. The plan was successful, and most of the NFTs were purchased by collectors seeking bargains.
However, the consolidation of the various NFTs held by FTX into a single wallet has sparked wild speculations that a sale is imminent, with proceeds from the sale used to compensate individuals that suffered losses on the exchange. Nevertheless, there are concerns that a liquidation event could hurt the prices of the collections involved. For this reason, some experts believe that FTX may opt to auction off the digital artworks, similar to what the bankrupt Three Arrows Capital did.
This news comes after FTX agreed to sell LedgerX for $50 million in a bid to recoup funds to pay debtors. FTX has been facing financial struggles and fallout after being among those caught up in the market meltdown earlier in 2022.
While the takeover of the high-value NFTs by the estate may raise eyebrows, it is not uncommon for bankrupt companies to sell their assets in order to recoup funds and pay off their outstanding debts. NFTs, in particular, have become a valuable asset class, and even when companies go bankrupt, they may have valuable NFT assets that can be sold to their creditors or collectors.
As the NFT market continues to see growth and increased mainstream adoption, it is likely that more companies will turn to NFTs as a way to recoup their losses. Investors and collectors in the NFT market should keep abreast of such developments to be able to identify investment opportunities and navigate risks.
In conclusion, the estate overseeing the bankrupt FTX crypto exchange has gained control of over $4 million worth of high-value NFTs. While there are speculations that the NFTs will be sold to recoup funds and pay off FTX’s outstanding debts, the estate’s decision regarding the NFTs remains unknown. As the NFT market continues to see growth and adoption, it is important for investors and collectors to stay informed about the latest developments and trends to enable them to maximize investment opportunities and protect themselves against risks.
