Crypto Market on Edge as FTX and Alameda Liquidate $98 Million: More Selloffs Ahead?

• FTX and its affiliate Alameda Research have liquidated a significant portion of their cryptocurrency assets, totaling $98 million in April.
• FTX creditors are expressing discontent with the proposed plan while demanding settlements in cryptocurrency rather than fiat currency.

In April, FTX, along with its affiliate Alameda Research, liquidated a substantial portion of its cryptocurrency assets, totaling $98 million. Notably, the bankrupt FTX exchange has been selling off its Solana (SOL) holdings to reimburse its customers, a trend that may continue in the future.

Data from blockchain analytics firm Arkham Intelligence reveals that tagged wallets associated with FTX and Alameda Research have initiated liquidations amounting to $97.35 million in the past month. FTX’s holdings include $33.85 million worth of BOBA and $11.22 million in ETH, in addition to controlling over 78% of the FTT supply. On the other hand, Pantera Capital has absorbed most of the sales of FTX’s Solana holdings, as reported by Crypto News Flash.

Meanwhile, Alameda Research holds significant positions in various assets, including $140 million worth of WLD, $102 million of BIT, $93 million of BTC, and $48 million of STG. Hence, there’s a likelihood that these two companies will continue divesting their stakes in the future.

Tagged FTX and Alameda wallets have sent a combined $97.35M to be liquidated in the past month.

FTX still holds $33.85M in BOBA and $11.22M in ETH – in addition to over 78% of the FTT supply.

Alameda’s main holdings are $140M of WLD, $102M of BIT, $93M of BTC and $48M of STG.… pic.twitter.com/bUpuJm9FSQ

— Arkham (@ArkhamIntel) May 9, 2024

Investor interest in FTX claims has surged following the estate’s draft recovery plan, which predicts a recovery rate of 118% for the majority of creditors, as reported by Crypto News Flash.

Louis Origny, Chief Technology Officer of claim buyer FTXCreditor, has observed a rise in claim purchasing activities. FTXCreditor has already acquired over 2,100 claims. Origny attributes this surge to two factors: firstly, the disclosure statement mentioning a potential 30% tax withholding rate for non-U.S. customers, likely prompting holders to sell their claims on the secondary market, and secondly, the inability of all claim holders to cash USD checks.

FTX creditors will get OVER 100% of their money back, but @LouisOrigny (co-founder of @ftxcreditor_com) & I discuss why this is a deceptive statement & break down the pros/cons of FTX's new plan. A LOT of customers are getting screwed (feat. @arush). pic.twitter.com/cvOekwUpQL

— Tiffany Fong (@TiffanyFong_) May 10, 2024

FTX Creditors Not Happy With the Repayment Plan

FTX creditors have been expressing their dissatisfaction with the proposed repayment plan. The main concern revolves around the bankruptcy estate’s decision to freeze the valuation of customer crypto assets in November 2022, coinciding with the lowest point of the bear market.

Sunil Kavuri, representing FTX creditors, has voiced opposition to the suggested compensation plan. He proposes that debts should be settled in cryptocurrency rather than their equivalent in dollars at the time of bankruptcy. Consequently, he urges stakeholders to vote against the proposed plan.

According to Kavuri, Sullivan and Cromwell – S&C/Debtors are obligated to FTX customers for the present value of their holdings, which currently stands at 3 to 10 times the initial petition prices.

FTX Plan

Takeaways
1) Sullivan and Cromwell included exculpation clause so they + no one involved sued for misconduct
2) S&C puppet John Ray in charge with no accountability
3) Petition prices + 18% (<$50k; 25% to 47% >$50K)
4) Cheques paid
5) Lose claim if cheques not cashed…

— Sunil (FTX Creditor Champion) (@sunil_trades) May 8, 2024

FTX declared bankruptcy in November 2022, amid the height of the crypto winter. However, in 2023, the crypto market witnessed a substantial rebound, consequently increasing the value of cryptocurrencies held by the exchange. FTX subsequently unveiled a plan to allocate the surplus billions in cash reserves towards servicing interest payments for its 2 million customer.