FTX Cryptocurrency Liquidation Process: First Week Cap of $50 Million, Subsequent Weekly Cap of $100 Million

Odaily Planet Daily reported that according to the screenshots of court documents related to the FTX liquidation cryptocurrency process shared by Arca Chief Information Officer Jeff Dorman on the , subject to the clear terms of the investment advisory agreement, the FTX debtor is authorized to sell digital assets. For these sales, the amount of realization available to the debtor may not exceed that weekly limit. The rules regarding the weekly limits for sales are as follows: If this order is executed that week, the weekly limit is $50 million. If execution is applied for on or after a Wednesday, the limit is $50 million from Wednesday to the next Friday of the week. For subsequent calendar weeks, the weekly limit is $100 million. Note that the debtor may temporarily increase the weekly limit by the amount of one calendar week with the prior written approval of the Board and the Special Committee and without further order of the court. At the same time, the debtor is required to provide notice of the interim increase to the U.S. Trustee. In addition, the debtor may permanently increase the weekly limit to $200 million upon further court order. In addition, the weekly limit is based on the total amount of digital asset sales and does not apply to derivative transactions using digital assets as a reference. Additionally, BeIncrypto reported that there are stricter guidelines for the sale of “insider-affiliated” tokens, requiring 10 days’ notice to creditors and the U.S. Trustee. Additionally, FTX plans to delve deeper into cryptocurrency hedging contracts, initially focusing on Bitcoin and Ethereum. Regarding Solana’s SOL token, FTX’s liquidation method is to release only $9.2 million in SOL per month, minimizing the direct market impact of this asset. Earlier news, Delaware court judge John Dorsey approved a plan to allow FTX to sell its billions of dollars worth of cryptocurrency. FTX filed a motion in August to sell, pledge and hedge more than $3 billion in crypto-asset holdings and hired Galaxy Asset Management as an adviser to help. Under the proposed plan, there would be a weekly sales limit of $100 million for most types of cryptocurrencies held, which could be permanently increased to $200 million. According to previous court documents, FTX holds $3.4 billion worth of cryptocurrency.