Collapsed cryptocurrency exchange FTX has over the week received approval from the U.S. Bankruptcy Court for the District of Delaware to sell and invest its cryptocurrency holdings, valued at over $3 billion, to settle its debt with creditors, leading some analysts to believe the funds will be dumped on the market.
Judge John Dorsey gave the green light, sidestepping two significant earlier concerns against the plan. FTX’s cryptocurrency assets are believed to surpass $3.4 billion.
This ruling grants FTX the permission to trade, stake, and hedge its digital assets. An attorney, on behalf of FTX’s ad hoc committee of customers, supported the motion. Meanwhile, a representative for the unsecured creditors stated that all parties were keen to fast-track the procedure.
As CryptoGlobe reported, a recent court filing has recently revealed that the estate of the once-giant cryptocurrency exchange, which filed for bankruptcy in November after collapsing to a bank run, has disclosed assets totaling approximately $7 billion.
Out of these assets, the exchange’s holdings include $1.16 billion in Solana ($SOL) tokens and $560 million in Bitcoin ($BTC). The documents also detail billions in payments the firm made to senior executives, including founder Sam Bankman-Fried.
The filings reveal the company has secured $1.5 billion in cash, in addition to the $1.1 billion it had on November 11. It holds $3.4 billion in crypto, valued at the end of August. This does not factor in their collection of over 1,300 lesser-known tokens, including MAPS and serum (SRM).
FTX’s liquidation of its digital assets could significantly impact the cryptocurrency market. Popular cryptocurrency analyst Lark Davis, however, noted that up to $50 million worth of digital assets can be sold per week, and that FTX must give written notice of its activities.
The cryptocurrency market, the analyst added, is able to absorb $50 million of added selling pressure per week, which could significantly reduced or even nullify the impact of FTX’s sales on the market.
The sales come amid at a time of economic uncertainty, with well-known economist Peter Schiff recently revealing mounting concerns regarding the stability of the U.S. dollar, saying there’s “going to be a massive crisis,” that will send “the economy into a tailspin.”
Schiff suggested investors should be escaping the U.S. dollar as there’s “gonna be a deluge before too long where it’s a rush to get out of the dollar.” The U.S. national debt has now ballooned to over $33 trillion, and to Schiff the repercurssions of this are soon going to be manifested as the interest on it becomes the leading government expenditure.
Featured image via Unsplash.
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