<p>The post <a href="https://coinpedia.org/news/ftxs-3-4-billion-asset-liquidation-may-disrupt-crypto-market-whats-in-store-today/" rel="noopener noreferrer nofollow">FTX’s $3.4B Asset Liquidation Could Rock Crypto Market; Here’s How</a> appeared first on <a href="https://coinpedia.org" rel="noopener noreferrer nofollow">Coinpedia Fintech News</a></p><p>Crypto exchange <a href="https://coinpedia.org/crypto-live-news/ftx-spent-huge-prepaid-funds-on-endorsement-before-collapse/" rel="noopener noreferrer nofollow">FTX</a> is facing a turbulent week as it seeks judicial approval for a $3.4 billion asset liquidation strategy. The move has invited scrutiny from U.S. regulators, primarily the U.S. Trustee, the bankruptcy branch of the Department of Justice. The proposal is set to be examined on Wednesday by Delaware Bankruptcy Court officials.</p><h2 id="regulators-raise-concerns" class="wp-block-heading">Regulators Raise Concerns</h2><p>The U.S. Trustee initially raised objections to <a href="https://coinpedia.org/news/crucial-day-for-crypto-market-top-expert-highlights-the-effect-of-cpi-and-ftx-liquidation/" rel="noopener noreferrer nofollow">FTX’s liquidation strategy</a>, asserting that FTX must publicly announce any intention to offload substantial assets like bitcoin (BTC) or ether (ETH). This concern stems from the potential market disruption that could ensue from selling off such significant amounts.</p><figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper"><blockquote class="twitter-tweet"><p><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f4a5.png" alt="💥" class="wp-smiley" style="height: 1em; max-height: 1em;">DEBUNKING FTX SELL-OFF MYTHS<br><br>Truth:<br><br>They hold $1.16b in <a href="https://twitter.com/search?q=%24SOL&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$SOL</a>, $560m in <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$BTC</a>, $192m in <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$ETH</a>, $119m in <a href="https://twitter.com/search?q=%24XRP&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$XRP</a> + more.<br><br>A lot of assets? Sure. Its sizeable and amounts to $3.4b in total digital assets.<br><br>Myth:<br><br>Imo, I don't think these sell-offs are going to CRASH the crypto market… <a href="https://t.co/UkpTs0MLcC" rel="noopener noreferrer nofollow">pic.twitter.com/UkpTs0MLcC</a></p>— Kyle Chassé (@kyle_chasse) <a href="https://twitter.com/kyle_chasse/status/1701538301071499720?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 12, 2023</a></blockquote></div></figure><p>In a compromise, FTX has promised to maintain a backchannel with the U.S. Trustee and committees representing its creditors, updating them privately on the proposed transactions. This arrangement intends to limit the proposal’s market-impacting revelations, considering that even the hint of a massive sale could send crypto markets into a downward spiral.</p><p>Read More: <a href="https://coinpedia.org/news/will-ftxs-3-4-billion-selloff-on-september-13-be-a-tipping-point-for-solana-and-the-crypto-market/" rel="noopener noreferrer nofollow">Will FTX’s $3.4 Billion Selloff On September 13 Be A Tipping Point For Solana And The Crypto Market?</a></p><h2 id="what-assets-are-being-liquidated" class="wp-block-heading">What Assets Are Being Liquidated?</h2><p>As of early 2023, FTX’s holdings include $685 million in locked Solana tokens, $529 million in FTT tokens, $268 million in Bitcoin, $90 million in Ethereum, and hundreds of millions in other cryptocurrencies like Aptos, Dogecoin, Polygon, XRP, and stablecoins. An additional $1.2 billion is held in crypto on third-party exchanges. The stakes are high: FTX aims to sell up to $100 million worth of tokens weekly, a limit that could climb to $200 million on a token-to-token basis.</p><figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper"><blockquote class="twitter-tweet"><p>I am seeing a lot of wrong information being spread about FTX liquidating their holdings <br><br>They can only sell up to $200m a week of assets <a href="https://twitter.com/search?q=%24SOL&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$SOL</a> is their largest holding but most of their Solana is locked up in vesting and can’t be sold for years <a href="https://t.co/9dFseAABOx" rel="noopener noreferrer nofollow">pic.twitter.com/9dFseAABOx</a></p>— Johnny (@CryptoGodJohn) <a href="https://twitter.com/CryptoGodJohn/status/1700905096224354566?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 10, 2023</a></blockquote></div></figure><p>If the court approves the asset sale, analysts predict a substantial market downturn, particularly for <a rel="noopener noreferrer nofollow">Solana</a>, one of FTX’s largest holdings. However, some market watchers argue that most of the Solana tokens are locked under a vesting schedule until 2025, reducing immediate liquidation fears.</p><figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper"><blockquote class="twitter-tweet"><p>Snippet: FTX Liquidation Proceedings<br><br>The wider crypto market experienced a downturn this week with Bitcoin falling 3% to $25.2k, and ETH declining 4.3% to $1.56k.<br><br>Solana (SOL) leads the large-cap decline with a 9% drop in price following the FTX sell-off fears as $3.4B could… <a href="https://t.co/wPokIuxSQh" rel="noopener noreferrer nofollow">pic.twitter.com/wPokIuxSQh</a></p>— S4mmy.eth (@S4mmyEth) <a href="https://twitter.com/S4mmyEth/status/1701597234453000651?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 12, 2023</a></blockquote></div></figure><p>Also Read: <a href="https://coinpedia.org/altcoin/solana-price-heading-to-5-ftxs-628m-worth-sol-liquidation-worries/" rel="noopener noreferrer nofollow">Can Solana Survive FTX’s Liquidation? Analyst Warns of Crash to $5</a></p><h2 id="the-problems-dont-end-here" class="wp-block-heading">The Problems Don’t End Here</h2><p>Complicating matters further is a $21 million lawsuit filed against LayerZero, an on-chain interoperability protocol. FTX accuses LayerZero of acting in bad faith and has leveled multiple charges, including fraudulent transfers and property recovery. The exchange seeks to recover assets transferred to wallets controlled by LayerZero’s former COO and a subsidiary, potentially affecting the exchange’s financial standing and its liquidation plan.</p><figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper"><blockquote class="twitter-tweet"><p>FTX files clawback (90-day pref.) lawsuit against<br>Layer Zero: $21m (Aug-Nov)<br>Ari Litan: $13m (8th/9th Nov)<br>Skip &amp; Goose (Litan owned): $6.5m (Aug-Nov)<br><br>Used insider knowledge to exploit the situation <a href="https://t.co/NYQnZgvWyb" rel="noopener noreferrer nofollow">pic.twitter.com/NYQnZgvWyb</a></p>— Sunil (FTX Creditor Champion) (@sunil_trades) <a href="https://twitter.com/sunil_trades/status/1700461661562257490?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">September 9, 2023</a></blockquote></div></figure><p>As <a href="https://twitter.com/Evgen_AI/status/1701197909721502127" rel="noopener noreferrer nofollow">Evgen Verzun</a>, the Founder of Kaizen.Finance, aptly pointed out, market history has shown that significant asset sales can trigger declines. This time appears to be no exception, and anticipation lingers that the crypto market may experience a downturn once the selling begins.&nbsp;</p><p><strong>What is your trading strategy for the week? Are you staying cautious?</strong></p>

FTX’s $3.4B Asset Liquidation Could Rock Crypto Market; Here’s How

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