May 29, 2024
Coinbase's research report assures that FTX's token sale won't disrupt the market
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Coinbase: FTX Token Sale Unlikely to Disrupt Markets Despite Bankruptcy

Coinbase (COIN) asserted in a research report on Thursday that the sale of tokens held by the bankrupt crypto exchange FTX would not create market turmoil, citing several mitigating factors. The report pointed out that the token sale would not flood the market, primarily because liquidations would be initially capped at $50 million per week and would gradually increase to $100 million in subsequent weeks. The report further emphasized that any permanent increase up to a maximum of $200 million per week would require approval from committees representing FTX debtors.

According to recent court documents, FTX holds approximately $1.16 billion in solana (SOL), $560 million in bitcoin (BTC), $192 million in ether (ETH), and an additional $1.49 billion in other tokens. The court’s recent ruling granted FTX the authority to sell and utilize these assets to repay its creditors. Additionally, the report highlighted the existence of stringent controls for selling certain insider-affiliated tokens, which necessitate a 10-day advance notice to the same committees overseeing the process. David Duong, head of institutional research, penned this information.

The report also noted that a significant portion of FTX’s Solana holdings remain locked until 2025 due to the token’s vesting schedule, as well as other tokens that are slated for sale.

Lastly, the report indicated that FTX would have the option to hedge its sales of bitcoin, ether, and other tokens through an investment adviser, pending committee approval.

Image by pixabay

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