FTX And Alameda Sold $98 Million In Crypto, More Selloff Coming?

During April, cryptocurrency exchange FTX and its affiliate Alameda Research liquidated a significant portion of their crypto assets, totaling $98 million. Notably, the bankrupt FTX exchange has been selling its Solana (SOL) holdings to reimburse its customers. It’s likely that this selling pressure from the exchange could persist in the future.

More Selloff Coming From FTX?

According to data from blockchain analytics firm Arkham Intelligence, tagged wallets associated with FTX and Alameda Research have initiated liquidations totaling $97.35 million in the past month. FTX’s holdings include $33.85 million worth of BOBA and $11.22 million in ETH, in addition to controlling over 78% of the FTT supply. On the other hand, Pantera Capital has absorbed most of the sales of FTX’s Solana Holdings.

Meanwhile, Alameda Research holds significant positions in various assets, including $140 million worth of WLD, $102 million of BIT, $93 million of BTC, and $48 million of STG. Thus, there’s enough possibility that these two companies would be divesting their stake going ahead.

The Surge In Claims

Investor interest in FTX claims has surged following the estate’s draft recovery plan, which forecasts a recovery rate of 118% for the majority of creditors.

Louis Origny, the Chief Technology Officer of claim buyer FTXCreditor, which has already obtained more than 2,100 claims, foresees an uptick in claim-purchasing activities. Origny identified two factors contributing to this expectation: firstly, the disclosure statement’s reference to a potential 30% tax withholding rate for non-U.S. customers, which may prompt holders to sell their claims on the secondary market, and secondly, the incapacity of all claim holders to cash USD checks.

On the other hand, creditors have also been voicing their opposition to the repayment plan. The primary issue at hand is that the bankruptcy estate halted the valuation of customer crypto assets in November 2022, coinciding with the trough of the bear market.

As a result, most of the FTX creditors have been demanding their repayments back in crypto holdings, instead of the USD. Crypto exchange FTX has yet to come up with a response in this regard.