FTX’s Crypto Liquidation Sales Unlikely to Cause Market Shock: Coinbase


18 Sep 2023 8:32 AM

The token sales won’t flood the market because liquidations are bound by volume limits, the report said....

  • Coinbase believes that the sale of tokens held by bankrupt crypto exchange FTX will not cause a market shock due to several mitigating factors.
  • Liquidations are limited to $50 million per week in the first phase and will increase to $100 million in the following weeks.
  • Committees representing FTX debtors need to approve a permanent increase to a maximum of $200 million a week.
  • FTX holds approximately $1.16 billion in solana (SOL), $560 million in bitcoin (BTC), $192 million in ether (ETH), and $1.49 billion in other tokens.
  • Strict controls are in place for selling certain 'insider-affiliated' tokens, requiring 10 days advance notice to committees.
  • A large portion of FTX's solana holdings are locked up until 2025 as part of the token's vesting schedule.
  • FTX will be able to hedge its sales of bitcoin, ether, and other tokens through an investment adviser once committee approval is received.

The sentiment of the article is neutral.

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You May Ask

What are the limitations on the weekly token liquidations during the first phase?What is the maximum weekly liquidation amount that can be approved by the committees representing FTX debtors?How much does FTX hold in solana, bitcoin, ether, and other tokens?What are the requirements for selling certain 'insider-affiliated' tokens?How will FTX be able to hedge its sales of bitcoin, ether, and other tokens?

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