Justin Sun considers acquiring FTX’s cryptocurrency holdings.

Justin Sun considers acquiring FTX's cryptocurrency holdings.

Justin Sun Considers Making A Bid For FTX Crypto Assets

In a surprising turn of events, Justin Sun, the Founder of Tron and Advisor to Huobi Global, has expressed his interest in acquiring the considerable crypto assets of insolvent crypto exchange FTX. This announcement comes just a year after Sun had considered a majority takeover of Huobi Global.

FTX liquidations currently hold a total of $1.3 billion in liquid crypto assets, excluding stablecoins, according to data from Messari, a provider of market intelligence products. Some of the largest holdings for FTX liquidators include popular cryptocurrencies like Solana (SOL), Ethereum (ETH), Aptos (APT), Dogecoin (DOGE), Tron (TRX), and Polygon (MATIC).

The sheer size of these holdings has raised concerns that the market could experience a crash if FTX were to start dumping its crypto assets. In response to these concerns, Sun took to X (formerly known as Twitter) to reveal his contemplation of purchasing FTX holdings in order to reduce their selling influence on the crypto market. Sun stated, “Contemplating an offer for FTX’s holding tokens and assets to reduce their selling impact on the crypto community. Let’s unite to bolster our crypto ecosystem.”

However, data from Messari indicates that FTX and Alameda’s BTC holdings, which amount to approximately $353 million, account for only 1% of BTC’s weekly trading volume. This suggests that the crypto market can easily absorb the selling impacts. On the other hand, FTX’s crypto holdings such as DOGE, TRX, and MATIC, ranging from $20 million to $30 million, account for 6-12% of weekly trading volumes, making liquidations potentially impactful to the crypto market.

It’s worth noting that most of FTX’s SOL tokens are locked up in Alameda and FTX ventures, with a unique monthly liquidation pattern. Only $9.2 million SOL tokens can be unlocked every month, allowing for easier management of selling impacts on FTX’s Solana holdings.

FTX Insolvency Court Case Still Ongoing

On November 11, 2022, FTX and several of its affiliates filed for bankruptcy in Delaware, United States. At the time of the collapse, the exchange was indebted with a staggering $8 billion due to a liquidity crisis.

Currently, FTX is under investigation by the United States Securities and Exchange Commission (SEC), while its Founder and CEO, Sam Bankman Fried, faced charges on 13 counts of alleged illegal proceedings he performed in FTX. However, five of these charges were withdrawn in June.

FTX liquidators are currently scheduled for a hearing on Wednesday, September 13. The outcome of this hearing may grant the liquidators clearance to begin immediate liquidations. Recently filed court documents have also revealed that the bankrupt crypto exchange still holds assets worth $7 billion, including digital assets, venture investments, and reclaimed properties.

Overall, Justin Sun’s consideration of acquiring FTX’s crypto assets adds another layer of complexity to the already tumultuous situation surrounding the exchange’s insolvency. As the crypto industry continues to evolve, it is crucial for stakeholders to unite and collaborate to ensure the resilience and growth of the crypto ecosystem.

FTT price steadies above $1

_Source: FTTBUSD on Tradingview.com

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