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The alarm bells began to ring when various assets were transferred from the FTX-linked wallet last week, signalling the possibility of a broader exodus of digital assets. The crypto community fears that this movement may be a precursor to asset sales as part of FTX’s bankruptcy proceedings.
Pump House, a prominent voice in the crypto space, brought attention to the situation, stating in a Sunday tweet, “Over $1.5 billion in SOL, SPL tokens and ‘wrapped’ bitcoins at the FTX address in Solana are moving. It looks like they are preparing for potential sales. Keep an eye on this, especially the ~$200 million in Bitcoin on Solana.”
Further insights into the situation from crypto onchain analytics platform Arkham Intelligence reveal that since August 31, the wallet has witnessed substantial transfers of approximately $6.23 million in Ethereum (ETH) and over $5 million in various tokens, including FTT, UNI and SUSHI. Presently, the FTX wallet holds coins worth a combined value of $19.2 million.
This development follows FTX’s earlier announcement on August 24 that it planned to “sell, stake, and hedge” $3 billion worth of cryptocurrencies as part of its bankruptcy proceedings. To facilitate this, the exchange enlisted the expertise of Mike Novogratz’s Galaxy Digital company.
Under the proposed plan, FTX collapsed last November and also sought to refund its creditors in fiat rather than BTC or Ether. As per a court document seen by ZyCrypto, the exchange sought to be permitted to sell tokens with a value of no more than $100 million per week, with the possibility of doubling this limit for individual assets. These restrictions are designed to mitigate the impact of large-scale transactions on the market. The court is scheduled to consider these prayers on September 13.
That said, the recent movement of the assets from the FTX-linked wallet raises essential questions about the potential impact on its creditors and users, even as the exchange’s victims continue to be treated to more glaring revelations.
Recently, Aditya_Baradwaj, a former engineer at Alameda Research, made a startling revelation about the firm’s management’s extravagant lifestyle as irresponsible behaviour.
“Careless risk management for a company handling billions of dollars in capital. Technical debt that would make any software engineer shed a tear. Millions lost in wasteful spending and the hubris that it wouldn’t matter,” said Baradwaj, blaming Bankmanfried for allegedly stealing all his life savings.