The bankrupt cryptocurrency exchange FTX could once again crash the market. But how?
The new management of FTX, the cryptocurrency exchange that went bankrupt last November, said they had the equivalent of $5.5 billion in assets at their disposal. In fact, this could be used to partially compensate creditors for their losses. However, this prospect gave rise to panic sentiment, as most of the exchange’s assets were in crypto, and their massive sale could allegedly cause a new market crash. So how many cryptocurrencies does FTX actually have left, and which ones could the exchange’s management sell? We will give more details about the situation.
We note that attempts to get rid of assets of cryptocurrency exchange FTX and trading company Alameda Research have already resulted in serious losses. More often than not, it was the lack of experience with decentralised finance industry platforms that led to losses.
As we previously reported, in the case of the Aave platform, the liquidators removed the collateral for the position, leading to its liquidation.
One of the properties acquired by cryptocurrency exchange FTX
What cryptocurrencies does FTX hold?
Of the aforementioned amount, $3.5 billion is in liquid cryptocurrencies, meaning those digital assets that can be sold relatively quickly in the market without significant loss of value. In addition to the native FTT token, FTX has Solana, XRP, DOGE, Aptos, MATIC, TON and BitDAO.
FTX liquid tokens
According to Cointelegraph’s sources, the liquidators valued the tokens at the time of the bankruptcy filing, which is mid-November. Cinneamhain Ventures partner Adam Cochrane commented as follows.
So the liquidators were counting token prices as of the date of the bankruptcy filing, and consider FTT’s $529 million “liquid” in that calculation, as well as the $685 million in Solana, which could simply sink the SOL price.
Note that Solana tokens are for the most part locked in staking, meaning that you would need to make certain transactions and wait for a period of time to access them. Why Adam doesn't mention this is unknown, but it could be a personal dislike of the project and its community.
It is also worth noting that trading volumes with SOL in the last 24 hours amounted to 1.48 billion dollars, which is several times the amount mentioned. More importantly, the liquidators of SOL are not interested in a market crash, as their task is to extract as much value as possible for the victims of the platform's collapse. This means that it can be assumed that transactions to dump large volumes of tokens will not be conducted through the market, but directly with some large investors. Such transactions are also called OTC.
Since FTX collapsed, its native token FTT has fallen in value by more than 97 percent.
FTT price in last 90 days
Solana has also gone under, but the cryptocurrency has seen impressive local growth in the last couple of weeks, tripling in value since December 29, 2022.
Solana exchange rate over the last 90 days
All of the tokens mentioned by liquidators as “liquid” could be sold on the market, but then again, they’re not interested in collapsing rates. A separate column in FTX’s asset list are illiquid digital assets. Among them are Serum, LUNA, and Solana-based wrapped versions of BTC and ETH. There are also little-known projects like TRUMPLOSE, BEAR and MEDIA.
Cochrane concluded that liquidators could easily sell off Bitcoin, Etherium and Stablecoin to minimise the impact on the market. All other assets are likely to have seriously depreciated in value, to the point where selling them would not be feasible at all. For every dollar of “found” assets, we might expect to get back no more than six cents, which is how Cochrane described the situation.
A full list of illiquid digital assets is available in the screenshot below.
FTX illiquid tokens
According to reporter Leo Schwartz, TRUMPLOSE is an “easter egg” that has to do with the way FTX and Alameda have supported Democrat politicians with large donations. TRUMPLOSE is a prediction token that FTX used during the US presidential election. Traders could buy TRUMPWIN or TRUMPLOSE tokens, which reached a value of $1 if Trump won or lost. FTX has almost 14 million of them.
Another "copy" asset is BEAR Coin, a cryptocurrency created to help animals through decentralised fundraising in collaboration with community organisations. FTX has at least 190 billion BEAR Coins on its balance sheet. Naturally, their real value is unlikely to be large.
In addition to the exchange’s assets, Schwartz has also shared an infographic on real estate in the Bahamas, which is linked to FTX and Alameda founder Sam Bankman-Fried. As you can understand from the data, tens of millions of dollars were spent on residences.
FTX properties in the Bahamas
Sam is still refusing to plead guilty to the charges against him, although his fellow crypto-imperium executives have already made a deal with the investigation. At the moment, Buchman-Fried is under house arrest after posting a $250 million bail, which he did not have to pay.
We believe that things will indeed come to a head sooner or later with the sale of the cryptocurrency exchange FTX's assets, as this is usually the case in bankruptcy cases. However, it is important to remember here that liquidator companies will not purposely collapse the market, as this will directly affect their performance. Accordingly, they may come up with other liquidity options in the form of direct sales of assets to interested parties, i.e. so-called OTC deals.
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