FTX Sells $3.4 Billion in Crypto Assets: Is Solana in Trouble?

BEVERLY HILLS, Calif. - Sept. 11, 2023 - PRLog -- The cryptocurrency world is on the edge of its seat as the next week holds the promise of significant developments, with all eyes on the embattled cryptocurrency exchange, FTX. Speculation is rife that FTX is on the verge of receiving court approval to liquidate an estimated $3.4 billion in cryptocurrencies.

Rumors swirling in the crypto sphere suggest that FTX could receive the green light for this substantial liquidation as early as September 13. Stakeholders and market observers are bracing themselves for the potential ripple effects this could have on the crypto market.

Bearish Sentiments Cast a Shadow
Prominent crypto analytics firm IntoTheBlock has drawn attention to the fact that FTX's impending $3 billion liquidation could potentially overshadow the recent positive developments in Ethereum and Solana. The firm commented:

"Despite positive news about Visa and a potential spot ETH ETF, FTX's impending $3B liquidation could be dictating market movement."

However, it's worth noting that panic might be premature. Well-respected crypto commentator Hitesh.eth has suggested that even if FTX secures approval by September 13, the actual liquidation may not commence immediately.

FTX's court documents indicate a desire to offload up to $100 million in digital assets weekly, with the possibility of occasionally stretching this cap to $200 million.

Altcoins Brace for Potential Impact
The prospect of a significant sell-off has ignited concerns, particularly regarding the altcoins held by FTX. Public records reveal that Solana constitutes the largest portion of their assets, valued at approximately $685 million.

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This impending uncertainty has triggered a flurry of activity among SOL investors, resulting in a notable 5.1% price dip over the last 24 hours.

As of now, SOL is trading around $18.52, a stark contrast to most other assets, which have largely maintained their positions or experienced minor declines.

Additionally, FTT, FTX's proprietary token, accounts for $529 million of the assets to be liquidated. Questions have arisen about FTX's liquidation strategy for these tokens due to their limited liquidity and market depth.

FTX's portfolio also includes significant holdings of other cryptocurrencies such as Aptos, Dogecoin, Polygon's MATIC, XRP, among others.

FTX Ramps Up Recovery Measures
FTX is actively pursuing avenues to recover assets amidst its financial challenges, leading to a series of legal actions.

Recently, the exchange initiated a clawback lawsuit against LayerZero, an omnichain interoperability platform, in an attempt to recover $21 million. In addition to this, FTX has launched legal proceedings against Ari Litan, LayerZero's Chief Operating Officer, seeking $13 million, and is also pursuing $6.5 million from Skip & Goose, a firm owned by Litan.

Furthermore, FTX is reportedly revisiting promotional fees that were disbursed to sports celebrities, including Naomi Osaka and Shaquille O'Neal. During its peak, the now-bankrupt exchange allocated substantial sums to celebrities for marketing campaigns.