The Court Permitted FTX To Start Asset Liquidation
The $3.6 billion assets liquidation permission sent markets tumbling.
Over the past few days, traders have expressed concern about the impending liquidation of the assets of the bankrupt FTX. The latest ruling from the Delaware County Court has authorized the company to start selling or investing its assets to recover funds for affected users. The matter will be handled by Galaxy Digital, led by Mike Novogratz.
The sale will be carried out gradually. Each week, assets worth $50 million will be liquidated. Gradually, this amount will increase to $100 million. Stricter rules will be applied to the sale of insider-affiliated tokens. Creditors and trustees will be notified 10 days before the sale.
Rumors of imminent liquidation and the latest court ruling put pressure on SOL price. The exchange accounts for 16% of the total circulating volume of the asset, therefore SOL lost 4% of its value last week.
However, FTX set out to minimize the risks of market pressure, and therefore decided to release $9.2 million worth of Solana to the market on a weekly basis.
Since the exchange owns only 1% of the total circulating supply of Bitcoin and ETH, traders are not concerned about possible pressure on these assets. They are confident that the market will absorb this amount easily. However, less liquid tokens such as DOGE, MATIC and TRON remain in question. FTX owns 6-12% of the entire supply of these tokens.
Bitcoin withstood the volatility after the court ruling was announced, losing only 0.9% of its value. ETH also behaved in the same way, losing 1% of its value. Solana confirmed traders' fears, falling in price by 2.2% after the release of the court ruling.