The post Crypto Industry Braces For Massive Selling As FTX To Dump $4.6 Bn Worth Of Altcoins appeared first on Coinpedia Fintech News
The crypto industry is bracing for increased selling pressure as FTX, a digital asset exchange, announced its plans to liquidate billions of dollars worth of assets to repay customers. During a House Committee hearing yesterday, FTX CEO John J. Ray III stated that his team had obtained wallet keys containing liquid digital assets.
However, it is estimated that over $8 billion worth of FTX customers’ assets are missing. This news comes as a surprise, as FTX was valued at over $32 billion just a year ago before filing for bankruptcy protection.
Additionally, the FTX crisis is reportedly becoming more complex as investigators are concerned about potential identity theft in order to obtain cash refunds.
“We have located over $5 billion in cash, liquid cryptocurrency, and liquid investment securities,” stated Andy Dietderich, an attorney for FTX, during a hearing in Delaware on Wednesday.
The hearing also revealed that FTX may be able to raise additional funds in the coming months to benefit customers, as the exchange has independent holdings in various countries that could be sold to recover customer funds.
Solana At Risk
According to FTX attorney Andy Dietderich, the exchange plans to liquidate non-strategic holdings with a book value of $4.6 billion. However, it should be noted that this amount does not include the assets that were seized by the Bahamas Securities and Exchange Commission (BSEC), which are estimated to be worth $170 million.
Dietderich stated that the decision to sell these assets is due to their high volatility, which could see the estimated value evaporate in a short period of time.
Among the assets seized by the BSEC are Solana, FTT, MAPS, OXY, WBTC, BONA, and several SPL tokens. Notably, Solana represents the largest portion of the seized assets, with a value of over $700 million, which is mostly locked.
The seized SPL tokens are estimated to be worth approximately $500 million, while the FTT and MAPS tokens are valued at around $575 million and $371 million, respectively. The OXY, WBTC, and BONA tokens are estimated to be worth $127 million, $90 million, and $82 million, respectively.
Coinbase Global director Conor warns that creditors should have low expectations for the $5 billion in recovered assets, as some of the assets are considered illiquid.
The recent revelations have had a minimal impact on the prices of the seized assets. Solana’s price, for example, has gained approximately 65% and 20% in the past 14 days and 7 days, respectively. Additionally, FTT is currently trading at around $1.39, up 16% on Thursday, while MAPS is trading at around $0.04860298, up 2.1% today. Oxygen (OXY) is trading at around $0.01318185, up 0.8% and WBTC is trading at around $18,174.57, up 4.4% today.
Crypto investors should be aware of the potential short-term volatility that may be caused by FTX’s selling pressure. Furthermore, large-scale dumping to the secondary market could cause fear in the bear-trapped market.