FTX, Alameda Liquidate $97M Assets Amid Bankruptcy, Raising Market Volatility Worries

FTX and Alameda Research have liquidated $97.35 million in assets, raising concerns about further sell-offs and market volatility. According to Arkham Intelligence, FTX has liquidated BOBA, ETH, and FTT holdings, while Alameda holds substantial positions in WLD, BIT, BTC, and STG. Creditors with claims under $50,000 will receive 118% compensation, while others will receive 100% plus interest. Investors are concerned about FTX's response to crypto-based repayment requests amidst ongoing liquidations and the fate of crypto assets in bankruptcy processes.

FTX and Alameda Research Liquidate $97 Million in Assets Amid Bankruptcy Proceedings, Raising Concerns of Market Volatility

As part of their ongoing Chapter 11 bankruptcy proceedings, cryptocurrency exchange FTX and its affiliated trading firm, Alameda Research, have been actively liquidating their holdings in various altcoins. According to blockchain analytics firm Arkham Intelligence, a combined total of $97.35 million in assets associated with these two entities have been moved to exchanges for liquidation purposes over the past month.

FTX's Liquidation Holdings

FTX's liquidated holdings include a substantial amount of BOBA tokens, valued at approximately $33.85 million, and Ethereum (ETH) tokens worth $11.22 million. Crucially, FTX also maintains control over a dominant 78% of the total supply of its native token, FTT.

Alameda Research's Holdings

Meanwhile, Alameda Research holds significant positions in a variety of assets, including $140 million worth of WLD tokens, $102 million in BIT tokens, $93 million in Bitcoin (BTC), and $48 million in STG tokens. The magnitude of these holdings suggests the potential for further sell-offs by both companies.

Customer Compensation Plan

The bankruptcy proceedings have outlined a compensation plan for FTX creditors. Those with claims amounting to $50,000 or less are set to receive approximately 118% of their allowed claim, providing relief to a significant portion (98%) of creditors.

However, the plan has raised concerns among some creditors who would prefer to receive their compensation in cryptocurrencies rather than fiat currency. The liquidation of crypto assets during the bear market of late 2022 has led to concerns about the current valuation of these assets.

Market Impact

The recent asset liquidations by FTX and Alameda Research have raised concerns about their potential impact on the cryptocurrency market. FTX's decision to sell its Solana (SOL) holdings to repay customers has sparked fears of further sell-offs, which could lead to increased market volatility.

Scrutiny of Crypto Asset Handling in Bankruptcy

The ongoing liquidations have thrust FTX's response to demands for crypto-based repayments into the spotlight. Observers are closely monitoring how crypto assets are treated in bankruptcy proceedings, as this precedent could shape future cases involving failed cryptocurrency companies.

Conclusion

The asset liquidations by FTX and Alameda Research have garnered significant attention in the cryptocurrency community. Creditors, investors, and the broader market await further developments in the bankruptcy proceedings, particularly FTX's handling of crypto-based repayments and the potential impact on the overall market.