FTX Receives Approval to Sell $3B in Crypto, Raising Concerns of Market Impact, US

Date:

Updated: 8:23 AM, Sat September 16, 2023

FTX, the collapsed cryptocurrency exchange, has received approval from the U.S. Bankruptcy Court to sell and invest its cryptocurrency holdings, valued at over $3 billion, in order to settle its debt with creditors. This decision has raised concerns among analysts, who believe that the large influx of funds into the market could have a significant impact on prices.

The approval was given by Judge John Dorsey, who disregarded previous concerns raised against the plan. FTX’s cryptocurrency assets are estimated to be worth more than $3.4 billion. The ruling grants FTX permission to trade, stake, and hedge its digital assets. The motion was supported by an attorney representing FTX’s ad hoc committee of customers, and all parties involved are eager to expedite the procedure.

According to recent court filings, FTX’s estate has disclosed total assets of around $7 billion. These assets include $1.16 billion in Solana tokens and $560 million in Bitcoin. The documents also revealed significant payments made to senior executives, including founder Sam Bankman-Fried. The company currently holds $1.5 billion in cash and $3.4 billion in cryptocurrency, as of the end of August. This figure does not take into account FTX’s collection of over 1,300 lesser-known tokens.

The liquidation of FTX’s digital assets has the potential to significantly impact the cryptocurrency market. However, crypto analyst Lark Davis has noted that FTX is only permitted to sell up to $50 million worth of digital assets per week and must provide written notice of its activities. Davis believes that the market can absorb this level of selling pressure, which could greatly reduce or nullify the impact of FTX’s sales.

The timing of FTX’s asset sales is notable, as it coincides with growing concerns about the stability of the U.S. dollar. Prominent economist Peter Schiff has expressed worry about the state of the national debt, which has exceeded $33 trillion. Schiff predicts a looming crisis that will send the economy into a tailspin and suggests investors should consider diversifying away from the U.S. dollar.

In conclusion, FTX’s approval to sell $3 billion worth of cryptocurrency has raised concerns about the potential market impact. However, restrictions on the selling volume and the market’s ability to absorb it may mitigate these concerns. Nevertheless, the sales occur as economic uncertainty looms, with experts warning about the stability of the U.S. dollar and the growing national debt. The consequences of these factors remain to be seen.

Frequently Asked Questions (FAQs) Related to the Above News

When did FTX receive approval to sell its cryptocurrency holdings?

FTX received approval to sell its cryptocurrency holdings recently, although the specific date is not mentioned in the article.

How much are FTX's cryptocurrency holdings valued at?

FTX's cryptocurrency holdings are valued at over $3 billion.

What concerns have been raised regarding the approval to sell FTX's cryptocurrency holdings?

The approval has raised concerns about the potential impact on the market, as some analysts believe that the funds will be dumped, leading to a market downturn.

Who granted FTX permission to trade, stake, and hedge its digital assets?

Judge John Dorsey from the U.S. Bankruptcy Court for the District of Delaware granted FTX permission to trade, stake, and hedge its digital assets.

What are some of FTX's major cryptocurrency holdings?

FTX's major cryptocurrency holdings include $1.16 billion in Solana ($SOL) tokens and $560 million in Bitcoin ($BTC).

How much in total assets has FTX disclosed according to the estate of the cryptocurrency exchange?

According to the estate of the cryptocurrency exchange, FTX has disclosed total assets of approximately $7 billion.

Will the liquidation of FTX's digital assets have a significant impact on the cryptocurrency market?

The liquidation of FTX's digital assets could have a significant impact on the cryptocurrency market, but some experts believe that the market can absorb the added selling pressure.

Is there any notice provided by FTX regarding its activities?

Yes, FTX will have to provide written notice of its activities, which will give the market some time to adjust.

What economic concerns might contribute to investors seeking alternatives to the U.S. dollar?

Concerns about the stability of the U.S. dollar and a potential economic crisis, as expressed by economist Peter Schiff, could contribute to investors seeking alternatives to the dollar.

How will market participants monitor the developments at FTX?

Market participants will closely monitor the developments at FTX and their repercussions on the wider market as the cryptocurrency landscape continues to evolve amidst economic uncertainties. (Current date, city, or country name is not mentioned in the article)

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

Shreya Gupta
Shreya Gupta
Shreya Gupta is an insightful author at The Reportify who dives into the realm of business. With a keen understanding of industry trends, market developments, and entrepreneurship, Shreya brings you the latest news and analysis in the Business She can be reached at shreya@thereportify.com for any inquiries or further information.

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