A cold wallet owned by collapsed crypto exchange FTX moved almost $10 million in altcoins from Solana to Ethereum since Aug. 31 for undisclosed reasons, according to on-chain data.
The altcoins include notable tokens like LINK, SUSHI, LUNA, and YFI. The transfers were conducted through Wormhole Bridge.
It is unclear if the transfers are connected to the exchange’s bankruptcy proceedings or its recent request to hire Galaxy Digital to sell its crypto holdings for fiat.
FTX did not respond to a request for comment as of press time.
FTX looking to sell assets
FTX recently filed a request with the bankruptcy court seeking permission to engage Galaxy Digital Capital Management as its investment manager for certain digital assets. The exchange also requested permission to stake some idle crypto assets to generate passive yield.
Under the proposed agreement, Galaxy would manage, trade, and convert FTX’s assets into fiat currency or stablecoins, and hedge the collapsed exchange’s exposure to volatile cryptocurrencies in return for a monthly fiduciary fee.
FTX argued that Galaxy’s expertise in selling large cryptocurrency positions without affecting the market made it a suitable choice. The engagement aimed to support FTX’s restructuring efforts by monetizing its cryptocurrency holdings.
Additionally, the exchange has filed a separate motion to establish guidelines for managing and selling its digital assets and to enter into hedging arrangements on eligible cryptocurrencies — primarily Bitcoin and Ethereum.
Creditors criticize pace
FTX is facing criticism from creditors over the slow pace of its bankruptcy plan negotiations.
The exchange’s attorney, Brian Glueckstein, resisted calls for expedited mediation at the latest bankruptcy hearing on Aug. 23, saying the process is on track for conclusion in the second quarter of 2024.
A draft plan proposed by FTX on July 31 outlined the intent to repay customers through asset liquidation and litigation against insiders. However, tensions have risen over FTX’s efforts to find a buyer for its international exchange, FTX.com, and the lack of information shared about incoming bids.
Creditors’ committee attorney, Kris Hansen, also highlighted the $50 million monthly spent on attorneys’ fees and other costs due to FTX’s delay in resolving creditor concerns. FTX seeks to increase creditors’ recovery through lawsuits against its founder, Sam Bankman-Fried, investment firm K5, and the founders of FTX acquisition targets.
The bankruptcy case was filed in November 2022 after allegations that FTX misused and lost billions of dollars of customers’ crypto deposits.
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Author: Assad Jafri
