{"id":16646,"date":"2023-01-19T17:59:38","date_gmt":"2023-01-19T17:59:38","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/ftxs-5-5-billion-in-alleged-liquid-assets-includes-locked-sol-cache-and-illiquid-ftt-holdings-bitcoin-news\/"},"modified":"2023-01-19T17:59:38","modified_gmt":"2023-01-19T17:59:38","slug":"ftxs-5-5-billion-in-alleged-liquid-assets-includes-locked-sol-cache-and-illiquid-ftt-holdings-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/ftxs-5-5-billion-in-alleged-liquid-assets-includes-locked-sol-cache-and-illiquid-ftt-holdings-bitcoin-news\/","title":{"rendered":"FTX’s $5.5 Billion in Alleged ‘Liquid Assets’ Includes Locked SOL Cache and Illiquid FTT Holdings \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Two days ago, bankruptcy administrators and FTX debtors published an update for unsecured creditors claiming the discovery of $5.5 billion in liquid assets. Roughly $3.5 billion of these funds are cryptocurrency assets, with 11 different digital currencies classified as \u201cliquid assets.\u201d However, two of the firm\u2019s top cryptocurrency caches are not liquid as the company\u2019s 47.51 million SOL tokens are locked and the firm\u2019s FTT balance distorts the realization of actual liquidity due to FTX\u2019s control of more than 80% of the supply.<\/strong><\/p>\n

Locked Solana and Illiquid FTT Assets to Complicate FTX\u2019s Bankruptcy Process<\/h2>\n

On Jan. 17, 2023, FTX debtors published<\/a> a press release and visual presentation of assets discovered since the company filed for Chapter 11 bankruptcy protection on Nov. 11, 2022. The FTX debtors claim to have found $5.5 billion via a \u201cherculean investigative effort,\u201d with $3.5 billion reportedly being crypto assets. The visual presentation explains that FTX controls around $685 million in solana (SOL)<\/a> tokens, approximately 47,511,173 SOL, and using today\u2019s SOL exchange rate, that cache is worth much more than $685 million.<\/p>\n

\"FTX's
Screenshot of the FTX debtors\u2019 presentation to the committee of unsecured creditors.<\/figcaption><\/figure>\n

However, the SOL owned by FTX debtors is locked and this aspect is not mentioned in the visual presentation shown to unsecured creditors. It has been reported that FTX\/Alameda managed to purchase 16% of the SOL supply from the Solana Foundation<\/a>, but there is a lockup schedule. The current stash of 47.51 million SOL equates to 8.82% of the total supply the Solana network will eventually issue over time. Presently, there is only 370,992,365 SOL in circulation and that does not account for the 47.51 million locked SOL owned by the liquidators.<\/p>\n

\"FTX's
The number of Alameda Research\u2019s locked solana (SOL) stake, according to solanacompass.com stats.<\/figcaption><\/figure>\n

The problem with calling this cache of SOL liquid is that it is locked and subject to linear vesting through 2025-2027, and it could take years before the funds can be accessed. Additionally, the debtors\u2019 cache of ftx token (FTT)<\/a>, a coin originally created<\/a> by the core FTX team, is also not liquid because FTX controls more than 80% of the entire supply. For example, the Ethereum (ETH<\/a>) address \u201c0x97f<\/a>\u201d controls 45,850,883 FTT, worth more than $1.8 billion using today\u2019s exchange rates. The FTX debtors\u2019 presentation shows the FTT as being worth $529 million worth of FTT tokens.<\/p>\n

The locked Solana issue and the fact that FTX owns most of the FTT in circulation puts these tokens more on the side of being illiquid<\/a>. This could complicate the bankruptcy process and payments to creditors because it would be difficult to convert these assets into cash or other crypto assets without significantly impacting the market price.<\/p>\n

\"FTX's
The liquidators\u2019 wallet that holds 45.85 million ftx tokens (FTT).<\/figcaption><\/figure>\n

Even if the SOL were unlocked, dumping 47.51 million SOL on the market would cause disruptions. Additionally, FTT suffers from low trading volume, limited exchange listings, few use cases, and the company controls most of the FTT supply. Because FTX holds a significant amount of the total FTT supply, it can easily affect the ability to trade it. Calling these caches of SOL and FTT tokens \u201cliquid\u201d is questionable as data does not support that definition.<\/p>\n

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\nTags in this story
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Assets<\/a>, Bankruptcy<\/a>, bankruptcy administrators<\/a>, Cash<\/a>, Chapter 11<\/a>, conversion<\/a>, Court Filing<\/a>, creditors<\/a>, creditors’ meeting<\/a>, crypto assets<\/a>, Crypto Funds<\/a>, crypto holders<\/a>, crypto market<\/a>, crypto trading<\/a>, crypto transactions<\/a>, Cryptocurrency<\/a>, cryptocurrency market<\/a>, debt<\/a>, Digital Assets<\/a>, Digital Currencies<\/a>, discharge<\/a>, Exchange Listings<\/a>, financial assets<\/a>, FTT<\/a>, FTX debtors<\/a>, Large Holders<\/a>, linear vesting<\/a>, liquid assets<\/a>, Liquidation<\/a>, Liquidity<\/a>, Market Price<\/a>, Ownership<\/a>, payments to creditors<\/a>, petitions<\/a>, plan<\/a>, Protection<\/a>, reorganization<\/a>, reorganization plan<\/a>, SOL<\/a>, Solana<\/a>, Trading Volume<\/a>, Trustee<\/a>, use cases<\/a><\/div>\n<\/div>\n

What are your thoughts on FTX\u2019s discovery of $5.5 billion in liquid assets, despite the presence of locked SOL and illiquid FTT holdings? How do you think this will impact the bankruptcy process and payments to creditors? Share your thoughts in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

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