Bankrupt cryptocurrency exchange FTX’s restructuring team’s repayment plan, which was approved in court on the 7th, saw the redemption of 178,631 SOL tokens (approximately $28 million) from the FTX/Alameda SOL pledge address today. It is speculated that these tokens may be transferred to a centralized exchange (CEX) for sale, possibly in preparation for repayment.
In the bankruptcy court hearing held in Delaware, USA on the 7th, the repayment plan proposed by FTX’s restructuring team was approved. Small creditors with claims below $50,000 are expected to start receiving compensation by the end of 2024, while larger creditors may have to wait until the first or second quarter of 2025.
Details such as the effective date of the subsequent payment plan and the expected distribution time are yet to be announced by FTX’s restructuring team. It was previously estimated that it would take two months.
FTX’s Selling Pressure?
However, according to analyst Yujin, who monitors the blockchain, the SOL tokens pledged by FTX/Alameda’s H4y…gFZ address were redeemed for 178,631 SOL tokens (approximately $28 million) this morning. It is possible that these tokens will be transferred to a CEX for sale. Currently, the address still has 7.09 million SOL tokens (approximately $1.107 billion) in pledge.
Based on previous transfer records, these redeemed SOL tokens will be distributed to multiple addresses, with most of them flowing into Coinbase or Binance in the future.
In fact, the redemption of SOL tokens from this address has been relatively regular, occurring around the 12th to 15th of each month, with approximately 170,000 SOL tokens being redeemed and transferred. According to data from Lookonchain, FTX/Alameda had already released 530,000 SOL tokens from pledge and transferred them to multiple addresses between July and September this year, with an average monthly release of 1.767 million SOL tokens.
It is speculated that FTX’s actions are in preparation for repayment, which may put selling pressure on SOL tokens. However, some analysts believe that FTX/Alameda’s actions will not have a significant impact on the price of SOL tokens because the scale of the released tokens is relatively small compared to the total holdings in wallets. Additionally, FTX’s selling is expected to be conducted through over-the-counter (OTC) trading, reducing the possibility of market volatility.
Despite the redemption of 178,631 SOL tokens by FTX today, the price of SOL tokens has not been affected and has risen 2% to $154.80 in the past 24 hours.
FTX’s Repayment Plan
According to previous reports by Dooq, the core content of FTX’s bankruptcy plan is to use the recovered funds to prioritize compensating users, and then to pay potential competitive claims raised by government regulatory agencies. Depending on the type of creditor’s claim, the majority of customers (creditors with amounts below $50,000) can receive approximately 118% of their losses in compensation, while some creditors can receive 142% of their losses.
According to the restructuring plan submitted by FTX to the Delaware bankruptcy court in May, once all assets are sold, the company estimates that there will be up to $14.5 billion to $16.3 billion in cash available for distribution.
However, it should be noted that future loss compensation will be calculated based on the USD price of cryptocurrencies held by FTX on November 11, 2022, the date when FTX filed for Chapter 11 bankruptcy. Therefore, unless users’ assets held on FTX are stablecoins, they will still suffer significant losses in reality.