In a completely unexpected move, Justin Sun, Founder of Tron and Advisor to Huobi Global has expressed his interest in acquiring FTX’s considerable crypto assets worth billions of dollars.
Justin Sun Considers Making A Bid For FTX Crypto Assets
Justin Sun, Creator of Tron, one of the world’s largest blockchain ecosystems, has hinted at the possibility of acquiring the assets of insolvent crypto exchange FTX. This statement comes a year after the crypto billionaire was contemplating a majority takeover of Huobi Global.
According to data from Messari, a provider of market intelligence products, FTX liquidations hold a total of $1.3 billion in liquid crypto assets excluding stablecoins. The report revealed some of the largest holdings for FTX liquidators which include cryptocurrencies like Solana (SOL), Ethereum (ETH), Aptos (APT), Dogecoin (DOGE), Tron (TRX), and Polygon (MATIC).
Given the considerable holdings, there have been fears that the market could witness a crash if the exchange were to start dumping its crypto assets. In response to this, Sun revealed in a post on X (formerly known as Twitter) that he was considering the possibility of purchasing FTX holdings.
The Tron Founder explained that the reason behind it was to reduce their selling influence on the crypto market.
“Contemplating an offer for FTX’s holding tokens and assets to reduce their selling impact on the crypto community. Let’s unite to bolster our crypto ecosystem,” Sun stated.
However, data from Messari revealed that FTX and Alameda’s BTC holdings, which are approximately $353 million, account for only 1% of BTC’s weekly trading volume, meaning the crypto market can easily handle selling impacts.
Whereas, FTX’s crypto holdings such as DOGE, TRX, and MATIC which range from $20 million to $30 million account for 6-12% of weekly trading volumes, and liquidations could significantly impact the crypto market.
Most of FTX’s SOL are also locked up in Alameda and FTX ventures, and they have a unique liquidation pattern, which allows only $9.2 million SOL to be unlocked every month. This monthly liquidation system allows selling impacts of FTX’s Solana holdings to be easily managed.
FTT price steadies above $1 | Source: FTTBUSD on Tradingview.com
FTX Insolvency Court Case Still Ongoing
On November 11, 2022, FTX and a number of its affiliates filed for bankruptcy in Delaware, United States. At the time, the exchange owed a staggering $8 billion after it collapsed due to a liquidity crisis.
The crypto exchange is currently under investigation by the United States Securities and Exchange Commission (SEC) while its Founder and CEO, Sam Bankman Fried was charged on 13 accounts for alleged illegal proceedings he performed in FTX, five of which were later withdrawn in June.
FTX liquidators are currently scheduled for a hearing on Wednesday, September 13. The result of the hearing may see the liquidators given clearance to begin liquidations immediately.
A recent court filing has also revealed that the bankrupt crypto exchange still holds assets worth $7 billion. Some of these assets include digital assets, venture investments, and reclaimed properties.
Featured image from Watcher Guru, chart from Tradingview.com