Justin Sun, founder of Tron and advisor to Huobi Global Station, expressed interest in acquiring a large number of crypto assets from FTX worth billions of dollars.
Justin Sun Considers Bidding for FTX Crypto Assets
Justin Sun, founder of Tron, one of the world’s largest blockchain ecosystems, has hinted at the possibility of acquiring the assets of bankrupt cryptocurrency exchange FTX. The statement comes a year after the crypto billionaire considered acquiring Huobi Global.
Data from market intelligence product provider Messari shows that FTX liquidators hold a total of $1.3 billion in liquid crypto assets (excluding stablecoins). The report revealed some of the largest assets held by FTX liquidators, which include cryptocurrencies such as Solana (SOL), Ethereum (ETH), Aptos (APT), Dogecoin (DOGE), Tron (TRX), and Polygon (MATIC).
Given the large amount of cryptocurrency held, there are concerns that the market could crash if the exchange starts selling its crypto assets. In response, Sun posted on X (formerly Twitter) that he is considering the possibility of buying FTX’s holdings.
The Tron founder explained that the reason for this is to reduce their sales influence on the cryptocurrency market.
“Considering an offer for tokens and assets held by FTX to reduce the impact of its sell-off on the crypto community. Let’s unite and support our crypto ecosystem,” Sun said.
However, data from Messari shows that FTX and Alameda’s BTC holdings are around $353 million, accounting for only 1% of BTC’s weekly trading volume, which means that the crypto market can easily handle the impact of the sell-off.
FTX holds crypto assets ranging from $20 million to $30 million in DOGE, TRX, and MATIC, accounting for 6-12% of weekly trading volume, and liquidations could have a significant impact on the cryptocurrency market.
The majority of FTX’s SOL is also locked up in Alameda and FTX Ventures, which have a unique liquidation model that only allows $9.2 million of SOL to be unlocked each month. This monthly liquidation system can easily manage the impact of a sell-off in FTX’s Solana holdings.
FTX bankruptcy court case still pending
On November 11, 2022, FTX and several of its affiliates filed for bankruptcy in Delaware, U.S. At the time, the exchange collapsed due to a liquidity crisis and had debts of up to $8 billion.
The cryptocurrency exchange is currently under investigation by the United States Securities and Exchange Commission (SEC), with its founder and CEO Sam Bankman-Fried being charged for allegedly running illegal proceedings at FTX against 13 accounts, five of which were later withdrawn in June.
The FTX liquidators are currently scheduled to hold a hearing on Wednesday, September 13. The outcome of the hearing could result in the liquidators being allowed to begin liquidations immediately.
A recent court filing also revealed that the bankrupt cryptocurrency exchange still holds assets worth $7 billion. Some of these assets include digital assets, venture investments, and recovered properties.