According to on-chain data, a cold wallet owned by the cryptocurrency exchange FTX has silently transferred nearly $10 million worth of altcoins from the Solana network to Ethereum since August 31st. These altcoins include LINK, SUSHI, LUNA, and YFI, and the transfer was executed through the Wormhole Bridge.
The reason and purpose behind FTX’s transfer of funds are currently unclear. Some speculate that these transfers might be related to the exchange’s bankruptcy proceedings. Others suggest that FTX could be considering a proposal to sell coins through Galaxy Digital to raise legal funds for debt repayment.
Earlier, FTX filed for bankruptcy and requested court permission to appoint Galaxy Digital Capital Management as the investment manager for certain specific digital assets. The exchange also sought the right to pledge certain idle cryptocurrency assets to generate passive income.
Under the proposed agreement, Galaxy would manage, trade, and convert FTX’s assets into fiat currency or stablecoins. This move is intended to mitigate risks and prevent a potential collapse of the exchange’s volatile cryptocurrencies, while also earning fees for custody services on a monthly basis.
FTX explained that their collaboration with Galaxy is driven by Galaxy’s expertise in selling off significant crypto positions without market disruption, making it the optimal choice. This partnership aims to support FTX’s restructuring efforts by capitalizing on holding their own cryptocurrencies.
In addition to this, the exchange also submitted a separate proposal to establish management and selling principles for its digital assets and to engage in risk-mitigation agreements for eligible cryptocurrencies, mainly Bitcoin and Ethereum.
Despite their efforts, creditors have criticized FTX for the slow pace of bankruptcy negotiation plans. On July 31st, FTX proposed a draft plan to repay customers through asset liquidation and internal litigation. However, tensions escalated due to FTX’s attempts to find a buyer for the international exchange FTX.com and the lack of transparency regarding upcoming bidding prices.
Kris Hansen, the creditors’ committee lawyer, emphasized that FTX’s delayed resolution of creditor concerns resulted in monthly legal fees and other expenses amounting to $50 million.
It’s worth noting that FTX is exploring ways to enhance creditor recovery efforts through lawsuits against founder Sam Bankman-Fried, investment firm K5, and the founders of the FTX acquisition target.