FTX’s $10 million crypto transfer sparks concerns of market disruption
- The FTX wallet facilitated the transfer of $6.23 million worth of Ether and over $4 million in various altcoins.
- FTX’s bankruptcy situation has seen interesting developments in recent months.
A wallet linked to the bankrupt exchange FTX has moved $10 million worth of digital assets from the Solana network to Ethereum. This move has sparked concerns of potential token dumps as the exchange grapples with its ongoing bankruptcy proceedings.
Data from the blockchain analytics platform Arkham Intelligence revealed that starting from 31 August, the FTX wallet facilitated the transfer of $6.23 million worth of Ethererum [ETH] and over $4 million in various altcoins. These altcoins include $1.2 million worth of FTX Token [FTT], $1.8 million in Uniswap [UNI], $1.3 million of HXRO [HXRO], $550,000 in SushiSwap [SUSHI], and $260,000 in Frontier Token [FRONT].
Significantly, the Wormhole Bridge facilitated the transfer of all these assets to another FTX wallet.
The Solana address 6b4aypBhH337qSzzkbeoHWzTLt4DjG2aG8GkrrTQJfQA, which is marked as an FTX cold wallet, is transferring funds. Tokens such as LINK, SUSHI, LUNA, and YFI on the Solana are transferred to the Ethereum through bridges such as Wormhole. The transfer has been since…
— Wu Blockchain (@WuBlockchain) September 2, 2023
Fears of token dumps rise as digital assets are shuffled
FTX’s bankruptcy situation has seen significant developments in recent months. On 24 August, FTX proposed a plan that involved appointing Mike Novogratz’s Galaxy Digital Capital Management as the investment manager responsible for overseeing the sale and management of its recovered crypto holdings.
Under this plan, FTX initially had permission to sell tokens worth up to $100 million per week. However, there was an option to raise this limit to $200 million for individual tokens. The purpose of these limits was to minimize the impact of token sales while ensuring FTX could satisfy its creditors.
In addition to this plan, the crypto exchange submitted a separate motion to hedge its larger Bitcoin[BTC] and Ether holdings.
Although these propositions were not legally binding at the time, the Delaware Bankruptcy Court scheduled a review of the token sales case on 13 September.
During a hearing held on 12 April, FTX disclosed that it successfully recovered approximately $7.3 billion in liquid assets.
The bankrupt exchange held a total of $4.3 billion in crypto assets available for stakeholder recovery at market prices as of 12 April. This was according to documents presented during the hearing.
As part of the current reorganization plan for FTX, there is a potential reboot of the cryptocurrency exchange. Its CEO John Ray III confirmed that the company had initiated the process of engaging interested parties for the relaunch of the FTX.com exchange.
The exchange’s legal team anticipates that the launch of this new exchange will be sometime in the second quarter of 2024.