US Court Allows FTX to Sell Its Digital Assets, Solana Makes A surprise Move
On Wednesday, September 13, the US district court of Delaware announced that crypto exchange FTX can sell its crypto holdings in order to pay back the creditors. During a court hearing, Judge John Dorsey granted approval for the motion and dismissed two objections raised against the plan. This decision permits the insolvent exchange to proceed with selling, staking, and hedging its crypto assets, valued at over $3.4 billion.
FTX has been granted permission to liquidate digital assets, with the exception of Bitcoin (BTC) and Ether (ETH), as well as specific insider-affiliated tokens, in weekly increments under established guidelines.
The initial week will have a cap of $50 million, followed by subsequent weeks at $100 million. There is an option to raise this limit, subject to prior written approval from the creditors’ committee and the ad hoc committee, or up to $200 million weekly with court approval.
Bitcoin, Ether, and insider-affiliated tokens can be liquidated through a separate decision by FTX, provided there is a 10-day notice to the committees and the U.S. trustee, who is appointed by the United States Department of Justice.
These sales will also be managed by an investment adviser, and information about them will remain confidential, with a redacted version available to the public. If there are written objections from the committees or the U.S. trustee, the sales will be postponed until the objections are resolved or until a court orders the sale.
FTX made a formal request in August for approval to conduct these operations, asserting that hedging their crypto assets would provide a means to "minimize potential losses before selling bitcoin or ether." Additionally, "staking specific digital assets" would be advantageous to the estates, ultimately benefiting creditors by generating low-risk returns on otherwise unused digital assets. This request was submitted through legal representation for FTX.
FTX’s holds a staggering $1.2 billion worth of Solana (SOL) still in its kitty. The broader crypto market made a surprise move to the north after market jitters earlier this week.
Solana price also gained 5% shooting past $18.50 levels earlier today. Some market analysts believe that the Solana sell-off is already over. The noteworthy point here is that we might have expected a significant sell-off of Solana. However, it's worth noting that Solana had already undergone a substantial sell-off in the previous week. This situation could potentially lead to a scenario resembling "sell the rumor, buy the news." It's important to mention that the majority of Solana assets, particularly around 7 million $SOL, have already been sold, leaving limited assets available for sale.