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Home News Delaware Judge Approves FTX’s Plan to Sell Up to $100 Million in Coins Weekly

Delaware Judge Approves FTX’s Plan to Sell Up to $100 Million in Coins Weekly

by sun

In a significant development, Delaware District Judge John Dorsey has granted approval for FTX, the beleaguered cryptocurrency exchange, to embark on a plan allowing the sale of billions in digital assets while adhering to specific guidelines, all aimed at fulfilling obligations to creditors.

FTX, one of the prominent cryptocurrency exchanges facing financial turmoil, received the green light on September 13 to liquidate billions of dollars’ worth of digital assets.

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The approval follows a proposal submitted by debtors in August, outlining the strategy for selling the exchange’s cryptocurrency holdings. This move seeks to navigate FTX’s complex financial situation while striving to ensure the return of funds to creditors.

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The approved plan imposes certain constraints on the sales process to ensure a systematic and well-structured approach. A financial advisor will oversee the estate’s sale activities, with a weekly sales cap set at $100 million for the majority of tokens.

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This cap can be increased to $200 million, but adjustments will be made on a case-by-case basis for individual tokens. Before selling prominent digital currencies such as Bitcoin (BTC) and Ethereum (ETH), the estate must provide a 10-day advance notice to the US Trustee’s office.

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As part of its strategic approach, FTX has expressed its intention to hedge Bitcoin and Ethereum (ETH) positions to mitigate the impact of market volatility on the proceeds generated from the sales.

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Additionally, the estate retains the option to stake specific tokens, participating in token-based activities that could generate additional income. This strategy is viewed as a means to potentially enhance returns for distribution to creditors.

In response to these developments, technology firm DWF Labs has expressed keen interest in acquiring FTX’s assets. A representative from DWF Labs, Andrei Grachev, conveyed via a tweet the firm’s commitment to offering the “best execution price” for the assets.

This potential acquisition is aimed at minimizing the risk of significant market fluctuations that could be triggered by large-scale, aggressive selling. DWF Labs seeks to prevent a scenario that might revert the cryptocurrency market to its 2020 capitalization levels.

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As FTX progresses with its asset liquidation plan under judicial approval, its actions and the responses of potential acquirers like DWF Labs will be closely monitored within the cryptocurrency industry. This development signifies a crucial step in addressing the challenges faced by the troubled exchange.

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