• Fri. Jun 14th, 2024

FTX GAINS REGULATORY APPROVAL TO LIQUIDATE ASSETS IN ORDER TO REPAY CREDITORS

Since the collapse of FTX in November of 2022 when the company filed for bankruptcy, its founder, Sam Bankman Fried has been in and out of court due to federal charges of fraud and conspiracy leveled against him mainly over the operation of the company as well as its subsidiary, Alameda Research to perpetuate illegal Ponzi schemes with which he amassed $8.7 billion in customer funds and utilized to place risky bets through Alameda.

The United States Securities Exchange Commission, S.E.C has granted FTX approval to liquidate $3.4 billion worth of its digital assets, the request was supported by a committee set up to represent FTXs customers who invested millions on the exchange and seek to be reimbursed. Due to the possible impact of this liquidation on the volatility of crypto markets, the company plans to repay its creditors in U.S dollars. Following a court hearing in Delaware, the U.S bankruptcy judge, John Dorsey granted approval for a weekly sale of crypto assets worth $100 million, U.S crypto firm, Galaxy Digital is proposed to oversee this sale. In addition, the company will be allowed to carry out staking in order to generate passive income and minimize risk on market volatility.

A BREAK DOWN OF FTX OWNED CRYPTO ASSETS

  • $560 million in Bitcoin (BTC)
  • $192 million in Ethereum (ETH)
  • $1.16 billion in Solana (SOL)
  • $120 million in USD Tether (USDT)
  • $119 million in Ripple (XRP)
  • $137 million in Aptos (APT)
  • $49 million in Biconomy Exchange Token (BIT)
  • $41 million in Wrapped Bitcoin (WBTC)
  • $37 million in Wrapped Ethereum (WETH)
  • $46 million in Stargate Finance (SGT)

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There has been widespread panic as regards the effect which FTXs liquidation may have on the market, upon release of the news, bitcoin experienced a 0.9% drop as well as Ethereum which saw a 1% drop, Solana however was more affected, having dropped by 2.2%.

Since filing for bankruptcy, FTX has recovered more than $7 billion worth of combined assets that are due to its customers. While a number of FTXs executives have pleaded guilty to criminal charges, its founder, Sam Bankman Fried pleads not guilty to charges of fraud against investors.

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