Why Did FTX Send Out A Warning to Its Followers?

The debtors of the estate of the now-defunct crypto exchange FTX have issued a warning on social media. They stress that Galaxy Asset Management exclusively handles the sale of digital assets tied to FTX’s bankruptcy.

However, the debtors spotlighted a complex term in the contract governing the unlocking schedule for these holdings.

FTX Issues Warning Against Third-Party Bid Solicitation

FTX issued a warning on X (formerly Twitter), cautioning that several unauthorized companies are attempting to sell assets under FTX control.

“Several non-authorized third parties are attempting to solicit bids from buyers on behalf of the FTX Debtors.”

Furthermore, it points out that if the FTX debtors sell the crypto, they must still abide by the terms outlined in the schedule approved by the United States Bankruptcy Court.

“If locked digital assets are sold by the FTX Debtors, the terms and conditions governing the schedule for unlocking these holdings would not change.”

Read more: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell

In September 2023, FTX got the green light to sell off its $3.4 billion under a strict plan. This was to ensure that the mass sell-off in assets would not substantially impact the market.

However, FTX indicated it would sell off $100 million a week, with the cap occasionally stretching to $200 million. Creditors will be repaid according to the value of their crypto at the time of bankruptcy, which was November 11, 2022. At that time, Bitcoin was trading at just $16,778 compared to its current long-term high of $64,000.

FTX Plans to Submit Vote to Creditors This Year

In December 2023, BeInCrypto reported that the next step involves submitting the plan to creditors for a final vote this year.

While more details need to be finalized, this will come before the final approval sought from US Bankruptcy Judge John Dorsey. 

Read more: Who Is Sam Bankman-Fried (SBF), the Infamous FTX Co-Founder?

By January 28, FTX had sold off approximately $707 million worth of assets over the course of a few months.

More recently, the exchange received approval to sell its 7.84% stake in artificial intelligence (AI) company Anthropic.

The sale will add $1 billion to the $6.4 billion FTX has earned from other sales. This will increase the chance that the estate will repay creditors fully.