Following the FTX crash back in November 2022, there was still a good chunk of crypto running into the billions left in the exchange’s wallets after the new team’s recovery efforts. These tokens have sat idle for a long time in the wallet as the legal battle between the exchange and its creditors waged on.
The time of idleness for these assets may now be over though as recent activities show that a large chunk of tokens from the FTX wallets are now on the move.
FTX Wallets Come Alive
The FTX wallets are still holding large amounts of various tokens worth over $3.5 billion. These tokens include Solana (SOL) which makes up a large portion of the funds. This is because the exchange was one of the biggest backers of the Layer 1 blockchain and received a significant amount of vested SOL tokens in return.
Given the large amount that the wallets currently hold, it is a cause of concern when the entity begins moving tokens. This is what happened when on Sunday, an X (formerly Twitter) user raised awareness of the large amounts being moved out of the wallet.
FTX wallets on the move
Looks like they’re gearing up for potential sell-offs.
— Pump House (@pumphouz) September 3, 2023
The tokens being transferred out, starting from August 31, include Ethereum’s ETH, FTX’s FTT Token, Sushiswap’s SUSHI, and Uniswap’s UNI, among others. In total, around $14 million have been moved. Amid this, the X users asked community members to keep an eye on the around $200 million in Wrapped Bitcoin (WBTC) on the Solana network that the wallets hold.
The assets were transferred to what looks to be another holding wallet using the Wormhole Bridge. However, while the destination of these tokens was not a crypto exchange, it has not stopped speculations about a potential sell-off from happening. “Looks like they’re gearing up for potential sell-offs,” the X user said.
Where Are The Tokens Headed?
A development that unfolded toward the end of August could tell where the tokens being transferred from the FTX wallet are headed. The exchange had filed a motion with the court on August 24 to allow it to employ the services of asset manager Galaxy Digital to help hedge its remaining assets against volatility.
The Investment Services Agreement would see Galaxy Digital take control of FTX’s assets. This way, FTX plans to protect the value of the remaining assets, as well as profit from the investment decisions made by the Asse management.
Given that the asset transfers started a week after this filing, it is plausible that the exchange is moving assets into the custody of Galaxy Digital. Nevertheless, such a move would still result in a possible sell-off since it would have to “seek and obtain the most favorable terms reasonably available” and would be authorized to sell up to $100 million in tokens a week.
The coin movements are also happening just one month until FTX founder Sam Bankman-Fried is expected to face trial on fraud and mismanagement charges. The courts have said that SBF’s defense could file to postpone the trial date which would be considered. But for now, it seems the former CEO is set to go to trial on October 3.