The collapse of FTX in 2022 marked a dramatic turn from its peak as a leading cryptocurrency exchange to a complex saga of repayments and liquidations. Two years later, the platform's compensation plan is finally taking shape, but it brings with it the potential for substantial selling pressure on several digital assets.
This article explores the progress of FTX's debt repayment strategy, identifies tokens most vulnerable to sell-offs, and examines how the exchange's innovative products continue to influence the crypto industry's trajectory.
Understanding the FTX Repayment Framework
In May 2024, court documents revealed that FTX owed creditors approximately $11.2 billion. The exchange estimated that it could distribute between $14.5 billion and $16.3 billion to these claimants. The plan stipulated that after paying all claims in full, remaining funds would be used to pay additional interest to creditors—with most receiving a 9% rate.
A critical aspect of this settlement is that all reimbursements are calculated based on cryptocurrency values at the time of FTX's collapse in November 2022, when Bitcoin traded at approximately $16,080. This approach creates both advantages and disadvantages for affected users.
The disadvantage is that investors who held digital assets will receive dollar equivalents based on 2022 valuations. For example, a user who held one Bitcoin would receive approximately $16,080 plus interest, missing out on the approximately 600% appreciation that occurred between the bankruptcy filing and the distribution date.
The advantage, however, is that without the subsequent crypto market rally, FTX might not have possessed sufficient funds to fully compensate its customers. From this perspective, recovering the original investment value provides some consolation.
Under the plan submitted to the U.S. Bankruptcy Court in Delaware, customers and creditors with claims of $50,000 or less—representing approximately 98% of FTX users—will receive about 118% of their claim value.
In August 2024, the situation evolved further when FTX and the U.S. Commodity Futures Trading Commission (CFTC) agreed to a $12.7 billion settlement. The CFTC agreed not to pursue additional penalties provided FTX complies with its reorganization plan. This government endorsement essentially ensures that litigation won't reduce funds available for customer reimbursement.
The court also approved FTX's sale of $1 billion in shares of AI startup Anthropic and authorized payments of $200 million in priority taxes and $685 million in subordinate tax claims to the IRS—far less than the $240 billion the agency initially claimed.
Current FTX Wallet Holdings and Potential Market Impact
FTX's current digital asset holdings are publicly visible on blockchain intelligence platforms like Arkham. At the time of writing, FTX's on-chain addresses hold approximately $1.475 billion in assets, with the largest position being in FTT tokens valued at approximately $680 million.
The exchange holds over twenty different cryptocurrencies with values exceeding $1 million each:
- FTT: $680.79 million
- OXY: $356.56 million
- MAPS: $147.10 million
- MEDIA: $131.76 million
- FIDA: $55.31 million
- RAY: $21.69 million
- BOBA: $17.86 million
- BRZ: $14.58 million
- DRIFT: $10.15 million
- JUP: $6.66 million
- JTO: $6.25 million
- USDC: $3.31 million
- SOL: $3.14 million
- RENDER: $2.77 million
- ASD: $2.76 million
- SRM: $2.72 million
- KMNO: $2.67 million
- MPLX: $2.65 million
- AMPL: $1.67 million
- STG: $1.18 million
Tokens Facing Significant Selling Pressure
Based on current market data, several tokens appear particularly vulnerable to price declines due to FTX's liquidation process:
FTT (FTX Token): With a fully diluted valuation (FDV) of approximately $870 million and daily trading volume around $18 million, FTX's holdings of $680 million in FTT represent a substantial overhang. Even with market maker support, buying pressure may be insufficient to maintain current price levels.
OXY (Oxygen Protocol): This token demonstrates particularly concerning metrics with only $3,000 in daily trading volume against an FDV of $365 million. FTX's $356 million holding in OXY has essentially frozen trading activity. The token's limited availability—primarily on decentralized exchanges and Kraken—further reduces potential liquidity.
MAPS (Maps.me Token): With an FDV of $185 million and FTX holdings of $147 million, this token faces significant selling pressure. Its modest daily trading volume of $130,000 provides minimal liquidity to absorb potential sales.
MEDIA (Media Network Token): This asset demonstrates an extreme case where FTX's holdings of $131 million dramatically exceed the token's entire FDV of $14.23 million.
Other Vulnerable Assets: FIDA, BOBA, SRM, MPLX, and AMPL all face varying degrees of potential pressure based on the proportion of FTX holdings relative to their market capitalization and trading volume.
Tokens With Minimal Impact Risk
Several tokens appear better positioned to withstand FTX's liquidation process due to their larger market structures:
RAY (Raydium): With a market capitalization of $1.3 billion and daily trading volume approaching $95 million, FTX's $21.69 million holding represents a manageable amount that could be absorbed without significant price disruption.
DRIFT (Drift Protocol): This token's $310 million market capitalization and $29 million daily trading volume provide sufficient liquidity to absorb FTX's $10.15 million position.
Other Resilient Assets: ASD, KMNO, and particularly major cryptocurrencies like Solana (with $4 billion daily volume against FTX's $3.14 million holding) appear unlikely to experience meaningful price impact. Established stablecoins like USDC and BRZ face no sell-off risk as they maintain their peg regardless of trading activity.
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FTX continues to methodically liquidate its holdings, transferring tokens to exchanges like Binance and Gate.io in increments ranging from $50,000 to $5 million daily. This gradual approach contrasts with the German government's large-scale bitcoin sales that recently created market volatility. The strategy suggests possible market maker involvement to minimize price impact.
FTX's Innovative Trading Products and Their Legacy
Beyond its exchange operations, FTX developed several innovative financial products that influenced the broader cryptocurrency ecosystem. Some of these innovations have been adopted by other platforms, while others remain unmatched in the current market.
Leveraged Tokens
FTX's leveraged tokens provided investors with leveraged exposure to assets without the complexity or liquidation risks associated with traditional margin trading. Unlike standard leveraged positions that require collateral and risk management, these tokens could be traded like standard spot assets while automatically maintaining their leverage through daily rebalancing.
This product significantly lowered the barrier to entry for leveraged trading, allowing retail investors to gain multiplied market exposure with relatively small capital allocations. The concept has been adopted by several exchanges, with KuCoin now offering similar products including 3x long Bitcoin and 3x short Ethereum tokens.
Tokenized Stock Products
Perhaps FTX's most ambitious innovation was its tokenized stock offerings, which provided blockchain-based representations of traditional equities like Alibaba and Coinbase. These products enabled global investors to access U.S. equities without establishing traditional brokerage accounts, operating 24/7 unlike conventional stock markets.
While protocols like Backed now offer tokenized stock products to non-U.S. users—including recently popularized offerings like Nvidia—American investors still lack access to similar platforms due to regulatory constraints.
Recent developments suggest this may change. Base network developer Jesse Pollak indicated that Coinbase is considering offering tokenized shares of its stock to U.S. users on its Ethereum layer-2 network. While no concrete plans have been announced, this suggests growing interest in bringing tokenized traditional assets to broader audiences.
Frequently Asked Questions
How will FTX determine the order of token sales?
The estate likely employs a structured liquidation strategy prioritizing tokens with sufficient market depth first while gradually working through less liquid assets. This approach aims to maximize recovery value while minimizing market disruption.
Can creditors opt to receive cryptocurrency instead of cash?
The current plan specifies USD payments based on November 2022 valuations. While some creditors have proposed alternative distribution methods, the approved plan uses dollar equivalents rather than in-kind cryptocurrency distributions.
What happens to any remaining funds after all claims are paid?
The reorganization plan specifies that surplus funds after paying all claims with interest will be distributed to shareholders. However, given the magnitude of claims, significant residual value for shareholders appears unlikely.
How long will the complete liquidation process take?
Based on the current pace of sales, the process will likely continue for several months. The estate appears to be prioritizing gradual sales over rapid liquidation to maximize recovery value.
Are any tokens completely safe from selling pressure?
Stablecoins like USDC and BRZ face no price risk from selling activity. Additionally, major cryptocurrencies with substantial daily trading volume relative to FTX's holdings appear well-positioned to absorb selling pressure.
Could FTX's trading products make a comeback on other platforms?
While leveraged tokens have been adopted by other exchanges, tokenized stock products face significant regulatory hurdles, particularly for U.S. users. Current developments suggest progress but no immediate solutions.