After the FTX crash in November 2022, a good chunk of crypto was left in billions of dollars in the exchange’s wallets even after recovery efforts by the new team. These tokens remained idle in the wallet for a long time as a legal battle ensued between the exchange and its creditors.
However, the period of inactivity for these assets may now be over as recent activity shows that a significant portion of the tokens are now in circulation from FTX wallets.
FTX Wallet Live
The FTX wallet still holds a large amount of various tokens worth over $3.5 billion. These tokens include Solana (SOL) which makes up a major portion of the fund. This is because the exchange was one of the biggest supporters of the Layer 1 blockchain and in return received a significant amount of underlying SOL tokens.
It is a cause for concern when entities start moving tokens, given the large amount currently held in the wallet. This happened after an X (formerly Twitter) user raised awareness about the huge amount being withdrawn from the wallet on Sunday.
🚨 FTX Wallet Running 🚨
worth over $1.5B $solSPL Token, and Wrapped #bitcoin FTX’s Solana Address Is Changing‼️
It looks like they are preparing for a possible selloff.
Keep an eye on it, especially the ~$200 million #solana Wrapped $BTC,#crypto #bitcoin , pic.twitter.com/sRDI6hvTJD
— Pump House 🍥 (@pumphouz) 3 September 2023
Tokens being transferred starting August 31 include Ethereum’s ETH, FTX’s FTT token, SushiSwap’s SUSHI, and Uniswap’s UNI, among others. In total, about $14 million has been transferred. Meanwhile, X users asked community members to keep an eye on nearly $200 million in wrapped bitcoin (WBTC) held in wallets on the Solana network.
The assets were transferred to another holding wallet using a wormhole bridge. However, although the destination of these tokens was not a crypto exchange, this has not stopped speculation about a possible selloff. X user said, “Looks like they are preparing for a possible selloff.”
Where are the tokens going?
A development that came to light in late August may reveal where the tokens being transferred from the FTX wallet are going. The exchange filed a motion with the court on August 24 to allow it to employ the services of asset manager Galaxy Digital to help protect its remaining assets from volatility.
Under the Investment Services Agreement, Galaxy Digital will take control of the assets of FTX. In this way, FTX plans to protect the value of the remaining assets as well as profit from investment decisions made by its management.
Given that the asset transfer began a week after this filing, it is plausible that the exchange is moving the assets into the custody of Galaxy Digital. Nevertheless, such a move would still result in a potential selloff as it would have to “reasonably seek and obtain the most favorable terms available” and would be authorized to sell up to $100 million in tokens in a single week.
The coinbase is also taking place just a month before FTX founder Sam Bankman-Fried is expected to face trial on charges of fraud and mismanagement. The courts have said that the defense of the SBF can file a petition to postpone the date of the trial which will be considered. But for now, it looks like the former CEO will be put on trial on October 3.
Despite the rumors, the price of FTT remains at $1.04. Source: fttbUSD on tradingview.com
Featured Image from Unsplash, Chart from Tradingview.com
source: www.newsbtc.com
