Important news for crypto exchange FTX, which recently made changes to its cryptocurrency disposal proposal to reassure US government authorities.
The exchange, currently in bankruptcy, intends to dispose of its large amount of cryptocurrencies to satisfy its creditors, but wants to do so without alarming the markets.
See below for all the details.
Summary
Crypto news: FTX changes its sales strategy to comply with US regulations
As anticipated, according to the latest news, crypto exchange FTX has made changes to its proposal to sell billions of cryptocurrencies in order to meet concerns expressed by the US Department of Justice trustee, as mentioned in a statement Tuesday.
In the new version of the proposal, FTX continues not to provide for a public notice on the transaction estimate, as these could significantly affect the markets, considering that the prospect of divestments of up to $100 million in crypto assets weekly has already affected cryptocurrency prices.
Initially, the US trustee had resisted FTX’s plan, arguing that any intentions to sell Bitcoin (BTC) or Ether (ETH) should be communicated extensively to allow third parties to voice objections.
In the compromise, FTX agreed to keep the US trustee informed confidentially, along with committees representing the exchange’s creditors.
FTX hopes this new proposal will please opponents as Judge John Dorsey considers the issue during a hearing scheduled for today in a Delaware court.
Also, earlier this week, FTX disclosed that it holds $1.16 billion in Solana SOLs and $560 million in Bitcoin.
What might happen if FTX does or does not get court approval? Some hypotheses
As we know, crypto markets have been in turmoil lately as FTX, the exchange grappling with regulatory challenges, prepares for a massive liquidation of digital assets while awaiting court approval.
This development, which follows FTX’s bankruptcy filing last November, is sending shockwaves through the entire cryptocurrency ecosystem.
On 24 August, FTX took a major step by filing a petition in the US District Court for the District of Delaware. This petition details FTX’s plans to have Galaxy Digital handle the liquidation of its assets.
If the proposal receives court approval, Galaxy Digital will be tasked with liquidating assets worth up to $200 million weekly.
Initially, the limit for the first week will be $50 million, but thereafter it may be increased to $100 million, with the option for FTX to request additional up to $200 million, at the court’s discretion.
The upcoming decision has already had a concrete impact on the markets. In particular, the SOL token has fallen significantly, posting an 8.1% loss in the last week.
Similarly, APT and FTT have been affected by the uncertainties, showing declines of 7.8% and 6.5% in the last week and last day, respectively.
FTX, in defense of its asset liquidation strategy, argues that it is acting in the primary interest of its creditors. Indeed, the exchange points out that the exceptional volatility typical of cryptocurrency markets is a significant risk.
FTX argues that this high volatility could result in sharp downward price fluctuations, potentially undermining the value of FTX-protected assets.
