FTX Receives Court Approval to Liquidate Billions in Bitcoin, Ethereum, and Solana In a significant development for the cryptocurrency world, the bankrupt exchange FTX has gained court approval to liquidate an estimated $3.4 billion in crypto assets. Here’s a breakdown of what this means and why it’s making waves:

FTX is a crypto exchange that faced turmoil last year when it went bankrupt due to alleged criminal mismanagement. The exchange’s co-founder, Sam Bankman-Fried, is currently awaiting a major criminal trial in connection with these events.

Why is FTX Liquidating Assets? The primary reason behind FTX’s asset liquidation is to repay creditors. When the exchange went under, billions of dollars in customer cash vanished. Liquidating these assets will help plug the significant financial hole left behind, which initially stood at a staggering $7 billion.

What Assets are Being Sold? FTX’s crypto holdings include approximately $1.16 billion in Solana (SOL), $560 million in Bitcoin (BTC), $192 million in Ethereum (ETH), and $137 million in Aptos (APT), among other lesser-known tokens. These figures are based on pricing as of August 31, 2023.

How Will the Liquidation Work? Mike Novogratz’s Galaxy Digital will oversee the sale of these assets as the investment manager. FTX will be permitted to sell up to $100 million worth of tokens per week, with the possibility of increasing this limit to $200 million for individual tokens, subject to court authorization.

Potential Impact on the Crypto Market Large-scale asset sales in the crypto world, such as the recent one by Vitalik Buterin, have historically influenced the market, often causing price drawdowns even before the sale begins. It remains to be seen how FTX’s liquidation will affect the market.

The Role of Bitcoin, Ethereum, and Insider-Affiliated Tokens Bitcoin and Ethereum, along with certain insider-affiliated tokens, will have separate considerations in the liquidation process. FTX can decide to sell these assets, but only after providing ten days’ notice to relevant committees and authorities.

FTX’s successful bid for court approval to liquidate billions in crypto assets marks a significant step in the exchange’s efforts to recover and repay its creditors. It’s a story that highlights both the challenges and resilience within the crypto industry.