For a long time, bankrupt FTX has struggled to pay back its previous clients. To aid with debt reduction, the struggling cryptocurrency exchange is currently using the “sell-to-pay” strategy. To repay clients, FTX is reportedly selling off its cryptocurrency-related assets, according to sources from Bloomberg.
Sell FTX’s cryptocurrency holdings to pay back past customers
According to Bloomberg, FTX is hoarding funds and liquidating cryptocurrency holdings to pay out bankruptcy advisors to customers whose accounts were blocked when the exchange collapsed in 2022. According to Chapter 11 monthly operations reports, the company’s four largest affiliates nearly quadrupled its cash to $4.4 billion at the end of 2023 from $2.3 billion in October. The report also stated that if all affiliates were included, total cash would likely be higher.
In addition, FTX is suing businesses that removed money from the exchange before its Chapter 11 filing, as well as allies of former CEO Sam Bankman-Fried. Claims over $1 million were selling at around 73 cents on the dollar last week, up from 38 cents in October, according to bankruptcy claims broker Cherokee Acquisition.
FTX explores several methods to pay back clients
Following its collapse in 2022, FTX has persistently endeavored to reach agreements with its previous clientele. Investors who lost their money when the cryptocurrency exchanges crashed have been battling to come to a settlement for a long time. But a tug of war has always been the point of friction between the two parties. Nevertheless, FTX’s cash recovery has a twist. The $8 billion fraud prosecution the company is presently facing resulted in the loss of most of its assets. However, it plans to bring legal action to recover all expenses. If the debt-ridden exchange operator wins the continuing legal battles, FTX may be entitled to billions of dollars in compensation.
Amidst the stock market meltdown, Chinese investors are turning to cryptocurrency
Reuters claimed that despite China’s ban on cryptocurrency trading since 2021, a large number of investors there are still managing to transfer their funds into digital assets. People are trying to move money overseas because of China’s economic slowdown, which “has invested in the mainland risky, uncertain, and disappointing,” a crypto exchange executive based in Hong Kong who asked not to be named told Reuters. “We see mainland investors entering this market almost every day.”
Due to China’s crackdown on the real estate industry, home prices have decreased recently, and the stock market has declined since 2021. Furthermore, despite restrictions on cross-border money transfers, Chinese investors may still trade on cryptocurrency exchanges like OKX and Binance and create foreign bank accounts to purchase cryptocurrency, the study said. According to Chainalysis, China has seen a rise in cryptocurrency-related activity as its peer-to-peer trading volume ranking jumped from 144 to 13 globally in 2023.
Multi-chain wallet prepared by Magic Eden
According to Crypto.News, NFT marketplace Magic Eden is getting ready to launch a multi-chain wallet meant to reduce market fragmentation. According to the source, the wallet would provide a more seamless experience across several blockchain networks maybe as soon as January 29. Managing Bitcoin, Ethereum, Solana, and Polygon in one location is made possible via Magic Eden’s multi-chain wallet, however, NFT fans typically use numerous wallets for various blockchains.