Two days in the past, chapter directors and FTX debtors printed an replace for unsecured collectors claiming the invention of $5.5 billion in liquid property. Roughly $3.5 billion of those funds are cryptocurrency property, with 11 completely different digital currencies categorised as “liquid property.” Nevertheless, two of the agency’s prime cryptocurrency caches will not be liquid as the corporate’s 47.51 million SOL tokens are locked and the agency’s FTT steadiness distorts the belief of precise liquidity resulting from FTX’s management of greater than 80% of the availability.

Locked Solana and Illiquid FTT Belongings to Complicate FTX’s Chapter Course of

On Jan. 17, 2023, FTX debtors printed a press launch and visible presentation of property found because the firm filed for Chapter 11 chapter safety on Nov. 11, 2022. The FTX debtors declare to have discovered $5.5 billion through a “herculean investigative effort,” with $3.5 billion reportedly being crypto property. The visible presentation explains that FTX controls round $685 million in solana (SOL) tokens, roughly 47,511,173 SOL, and utilizing at this time’s SOL alternate price, that cache is price rather more than $685 million.

Screenshot of the FTX debtors’ presentation to the committee of unsecured collectors.

Nevertheless, the SOL owned by FTX debtors is locked and this facet shouldn’t be talked about in the visible presentation proven to unsecured collectors. It has been reported that FTX/Alameda managed to buy 16% of the SOL provide from the Solana Basis, however there’s a lockup schedule. The present stash of 47.51 million SOL equates to eight.82% of the whole provide the Solana community will finally challenge over time. Presently, there’s solely 370,992,365 SOL in circulation and that doesn’t account for the 47.51 million locked SOL owned by the liquidators.

The variety of Alameda Analysis’s locked solana (SOL) stake, based on solanacompass.com stats.

The issue with calling this cache of SOL liquid is that it’s locked and topic to linear vesting by 2025-2027, and it might take years earlier than the funds will be accessed. Moreover, the debtors’ cache of ftx token (FTT), a coin initially created by the core FTX workforce, can be not liquid as a result of FTX controls greater than 80% of the complete provide. For instance, the Ethereum (ETH) deal with “0x97f” controls 45,850,883 FTT, price greater than $1.eight billion utilizing at this time’s alternate charges. The FTX debtors’ presentation reveals the FTT as being price $529 million price of FTT tokens.

The locked Solana challenge and the truth that FTX owns a lot of the FTT in circulation places these tokens extra on the facet of being illiquid. This might complicate the chapter course of and funds to collectors as a result of it might be tough to transform these property into money or different crypto property with out considerably impacting the market value.

The liquidators’ pockets that holds 45.85 million ftx tokens (FTT).

Even when the SOL have been unlocked, dumping 47.51 million SOL available on the market would trigger disruptions. Moreover, FTT suffers from low buying and selling quantity, restricted alternate listings, few use instances, and the corporate controls a lot of the FTT provide. As a result of FTX holds a big quantity of the whole FTT provide, it will probably simply have an effect on the flexibility to commerce it. Calling these caches of SOL and FTT tokens “liquid” is questionable as knowledge doesn’t help that definition.

What are your ideas on FTX’s discovery of $5.5 billion in liquid property, regardless of the presence of locked SOL and illiquid FTT holdings? How do you suppose this can affect the chapter course of and funds to collectors? Share your ideas in the feedback part beneath.

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