FTX's $3.5B Crypto Portfolio Liquidation: Dispelling the Myths

In the world of crypto where rumors fly fast and thick, the weekend brought with it quite the stir about FTX and its whopping crypto holdings. A certain image displaying FTX’s crypto assets (worth an estimated $3.5B) made rounds on social media, sparking two dominant rumors:

🔥 Rumor 1: FTX plans to commence token sales this week.

🔥 Rumor 2: The exchange will liquidate all its tokens in a single sweep.

The result? A market frenzy, causing many of FTX's portfolio tokens to dive deep into the red. But before you jump into conclusions, let’s set the record straight.

🛑 Debunking Rumor #1:

While FTX has indeed outlined a recovery strategy for its creditors, the green light from the courts is still pending. The plan is set for presentation before the Delaware Bankruptcy Court on September 13th. The crypto community is buzzing with anticipation, but remember, courtroom outcomes can be as unpredictable as the opening week of NFL.

🛑 Debunking Rumor #2:

Upon any approval of FTX's recovery plan, there are notable constraints. Court documents suggest that FTX would only be permitted to sell up to $100M in crypto every week. This cap could potentially rise to $200M with court nod, but that’s the ceiling. Furthermore, certain assets, like a significant portion of their $SOL tokens, are locked in a vesting schedule stretching from 2025-2027.

📊 Final Take:

For those on the edge of their seats, breathe easy. FTX is not about to flood the market with billions in crypto. On a meter of things we are worried about, this gets a score of 3.

Here's a roundup of major events to keep an eye on this week:

- September 12 (Today): Gary Gensler, the leader of both the SEC and ACC, will present his case to the U.S. Senate Banking Committee on why he believes most cryptocurrencies should be classified as securities, and the role the SEC should play in overseeing the sector.

- September 13: The U.S. is set to unveil the Consumer Price Index (CPI) figures for August.

- September 13: The Delaware Bankruptcy Court will decide on the fate of FTX's liquidation proposal.

- September 16: $APE, Bored Apes ecosystem's native token, is slated to release 11% of its total supply, valued at a whopping $47.5M, marking one of the year's most substantial token releases.

Keep an eye on how these shake out in the market.

The Twitterverse

A collection of the most interesting stuff on Crypto Twitter this week

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