FTX, a defunct cryptocurrency exchange, had $3.4 billion in of digital assets, including almost $1.1 billion worth of Solana.
Bitcoin, with $500 million as of August 31st pricing, is their second largest asset, followed by eth, at $192 million.
In addition to the $118 million in XRP and about $1 billion in other cryptocurrencies and tokens, the bankruptcy estates have $41 million in wBTC and $37 million in wETH.
This Wednesday, a hearing will be scheduled to request the court’s approval to sell these assets in order to hedge against volatility.
The transaction, together with any necessary hedging or staking, will be handled by Galaxy Assets Management.
According to the proposed plan submitted to the court, the sale would be capped at $50 million the first week, $100 million the following weeks, and up to $200 million at the trustee’s discretion.
If the suggested schedule is followed, all $3.4 billion would be paid off by April, just in time for the halving.
If the court authorizes the transaction, creditors of FTX would get dollars, in contrast to MT Gox, which will refund the overwhelming bulk of its assets in cryptocurrency.
So far, creditors have claimed $16 billion, and the trustee’s presentation suggests that by the filing date of 29 September 2023, total claims may amount to around $25 billion.
The overall value of FTX’s holdings, including cash, cryptocurrency, and other assets, is $7 billion. Therefore, creditors will get a sum somewhat less than half of what was owed to them.
Since the roughly 36,075 creditors owned a wide variety of cryptocurrencies in varying quantities, and some are not crypto creditors per se but rather many companies, it’s possible that a straightforward plan to refund the crypto in crypto won’t work, since the exchange obviously has Sol more than other assets.
They want to convert it all to dollars and return the fiat currency, a move that might lead to more losses as a result of exchange rate fluctuations.
Solana’s price may be particularly vulnerable to the prolonged process, but the $200 million for eth or the $500 million for bitcoin may not seem like a big deal in the grand scheme of things.
No further objections may be submitted at this time. There has been no written protest. Therefore, the deal might be approved by the court this coming Wednesday.