A wallet linked to the bankrupt FTX exchange recently unstaked 177,693 SOL tokens, valued at $23.75 million, from Solana, according to on-chain data.

Typically, tokens are sent to exchanges to be sold after unstaking. However, as of press time, FTX has yet to move its unstaked Solana holdings.

Nevertheless, the transaction raised concerns that FTX might plan to sell more Solana tokens, as it had done earlier. Earlier this year, the FTX estate auctioned portions of its Solana assets to institutional investors like Pantera Capital and Galaxy Trading.

Meanwhile, a key detail in this recent transaction is that the unstaked 177,693 SOL represents only a fraction of the wallet’s holdings. Solscan data shows that the FTX-associated wallet still holds 7.1 million SOL, valued at around $953 million.

Market observers noted that such large SOL tokens could significantly impact the asset price if unstaked and sold.

Despite these speculations, Solana continues to perform well. SOL gained 2.5% over the past 24 hours, trading at $135.26 at the time of writing.

This price performance could be linked to the broader crypto market recovery, with Bitcoin climbing to $58,000, while other major digital assets like Ethereum, BNB, and others also registered gains.

Alameda Transfers WLD and AAVE

In a related development, FTX’s sister company, Alameda Research, shifted some of its crypto holdings to centralized exchanges Binance and Coinbase.

According to Arkham Intelligence data, Alameda moved 143,800 Worldcoin (WLD), worth approximately $200,000, to Binance and 373 AAVE, valued at $55,300, to Coinbase within the last eight hours.

These transactions are part of the firm’s ongoing asset liquidation efforts amid its bankruptcy proceedings. 

Meanwhile, the defunct company wallet still holds about $220 million in digital assets, primarily in BitDAO (BIT), Worldcoin, and Stargate Finance, with a combined value of $130 million.

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Caroline Ellison, former co-CEO of Alameda Research, has requested no jail time for her role in the FTX collapse, according to a Sept. 10 court filing.

Her legal team argued that her sentence should be limited to time served, followed by supervised release, because of her extensive cooperation with the authorities during Sam Bankman-Fried’s trial.

Further, the lawyers noted that the Probation Department recommended a time-served sentence and three years of supervised release.

They stated:

“The Probation Department recommends a sentence of time served with three years of supervised release. The PSR grounds this recommendation in Caroline’s extraordinary cooperation with the government, her otherwise unblemished record, and the numerous testimonials of Caroline’s honesty and ethical behavior both before she started working at Alameda and since she left Alameda.”

The defense also argued that Ellison poses no risk of repeating her offenses and is not a threat to public safety. They claimed that her early admission of guilt, full responsibility, and extensive cooperation warrant leniency and respect for the law.

Ellison’s cooperation

The court filing also contained statements from her former colleagues, friends, and family, illustrating how Ellison’s helpfulness aided the US authorities’ case against the incarcerated founder of the defunct crypto exchange.

Notably, John J. Ray III, the CEO overseeing FTX’s bankruptcy estate, credited Ellison’s assistance as “valuable” in stabilizing the exchange during its collapse. He said her cooperation helped his team protect and preserve “hundreds of millions of dollars in Debtor assets” to benefit creditors and understand FTX’s systems.

Meanwhile, attorneys representing class action lawsuits against FTX executives praised her contributions to recovering creditor funds.

Robert Cleary, the court-appointed examiner, echoed similar sentiments in his brief remarks about Ellison’s helpfulness.

Additionally, the lawyers pointed out that excerpts from Ellison’s diary provide insights into her mindset while at Alameda. They also noted that her romantic feelings for him complicated her work relationship with Bankman-Fried.

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Bankrupt crypto exchange FTX announced on Aug. 21 that its reorganization plan has garnered strong preliminary support from creditors.

According to FTX, over 95% of creditors have endorsed the plan, representing 99% of the claims by value. This broad backing indicates widespread consensus among FTX creditors.

FTX CEO John J. Ray III emphasized the significance of this support, noting that it highlights the plan’s approval within the community. He stated:

“Importantly, the Plan’s innovative structure provides for the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors and resolves complex disputes with dozens of governmental and private stakeholders.”

Despite this support, some critics argue that FTX’s approach disadvantages creditors by valuing assets based on their November 2022 prices—when the firm declared bankruptcy—instead of current market values.

Nevertheless, FTX expressed confidence that the overwhelming support will ensure the plan exceeds the acceptance thresholds required under the Bankruptcy Code.

FTX plans to file the final voting results with the US Bankruptcy Court for the District of Delaware before the Confirmation Hearing, scheduled for Oct. 7, 2024.

Former FTX exec petitions US

The community backing for the FTX plan comes as a former executive of the exchange, Ryan Salame, files action against the US government.

On Aug. 21, Salame alleged that the US government reneged on their promise not to pursue campaign finance charges against his partner, Michelle Bond, which was a key element of his plea deal.

On social media platform X, he stated that his lawsuit was to “tell the truth and expose un-American tactics.” He added:

“It’s all true but I just made a court filing I’m pretty nervous about because I know it means the most powerful body in the world is going to come at me and my loved ones again, but I’m hoping it encourages more people to be honest and tell the truth and expose un-American tactics.”

Salame, along with other former FTX executives, including Alameda CEO Caroline Ellison, Nishad Singh, and Gary Wang, had pleaded guilty to several crimes related to their roles at the defunct exchange.

Salame was to begin serving a 7.5-year prison sentence on Oct. 13. He had also been ordered to pay over $6 million in forfeiture and more than $5 million in restitution.

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US District Judge Peter Castel has approved a $12.7 billion settlement in a case involving the US Commodity Futures Trading Commission (CFTC), the bankrupt FTX exchange, and its affiliate, Alameda Research, according to a court filing dated Aug. 7.

Judge Castel’s ruling mandates that FTX and Alameda must pay $8.7 billion in restitution to investors affected by their 2022 collapse and an additional $4 billion in disgorgement. Notably, the CFTC will not impose civil monetary penalties, so the $12.7 billion will be directed to FTX creditors.

The settlement significantly reduces the CFTC’s initial demand of about $52.2 billion in restitution, disgorgement, and penalties.

Meanwhile, the court has also permanently barred FTX and Alameda from offering crypto trading services or acting as market intermediaries. Judge Castel stated:

“[FTX and its related entities are permanently barred from] soliciting, receiving, or accepting any funds from any person for the purpose of purchasing or selling any commodity interests or digital asset commodities, including but not limited to bitcoin (BTC), ether (ETH), or tether (USDT).”

This ruling follows a July agreement between FTX and the CFTC to resolve ongoing litigation and avoid the costs and delays of further court proceedings.

The settlement occurs amid controversy over FTX’s proposed reorganization plan, which aims to pay approximately 98% of users 118% of their claims, especially for amounts under $50,000. This plan is based on asset values from the November 2022 bankruptcy filing.

However, critics argue that the plan undermines creditor value since many digital assets have appreciated since the firm’s collapse.

FTX examiner needs more time

FTX Examiner Robert J. Cleary has filed a motion requesting more time to complete its Phase II Report, citing the need for additional documents and interviews with key witnesses.

Cleary’s investigation, which began in June, includes examining legal services provided by Sullivan & Cromwell LLP to Sam Bankman-Fried, the pre-bankruptcy sale of Ledger Holdings Inc., and inconsistencies in FTX US’s balance sheet. The original deadline for the report was Sept. 11.

Cleary now seeks an extension until Sept. 27 for the public release of his report.

Nicholas Hall, a bankruptcy lawyer, said the Examiner’s request showed that the parties under investigation are not cooperating with the Examiner. He also pointed out that creditors would vote on the FTX’s plan without crucial information that could influence their decisions.

He added:

“By requiring FTX creditors to vote before the Examiner’s report is available, the Plan effectively bars them from changing their vote or later objecting based on new information. This is fundamentally unfair and prejudices the rights of creditors.”

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The Bahamas Securities Commission has announced the passage of new crypto legislation nearly two years after FTX’s collapse.

The Digital Assets and Registered Exchanges Act, 2024 (DARE 2024) aims to provide regulatory clarity for the country’s digital assets industry and re-solidify its position as a pro-crypto hub.

Christina Rolle, the executive director of the Securities Commission, said DARE 2024 provides a new standard in digital asset regulation and is a testament to the financial regulator’s commitment to robust risk management. She added:

“We have created a framework that not only focuses on investor protection, but also encourages responsible innovation, positioning The Bahamas at the forefront of digital asset regulation globally.”

The Bahamas attracted global scrutiny following the shock collapse of the FTX exchange, which was headquartered in the country, in 2022. Before its failure, the firm was valued at $32 billion, and its now imprisoned founder and CEO Sam Bankman-Fried, also based in the Bahamas, was viewed as the golden boy of a thriving industry.

At the time, the Caribbean nation faced increased questions about the potency of its crypto regulations and a decline in the number of crypto companies expanding to its region.

DARE 2024

DARE 2024 broadens the scope of regulated digital asset activities to include advisory and management services. It also regulates digital asset derivatives, staking services, and other activities as the industry evolves.

The law introduces stricter requirements for digital asset exchanges to ensure robust investor and consumer protection. It also establishes a comprehensive custody framework for digital asset custody and custodial wallet services.

DARE 2024 provides clear definitions and guidelines for staking services and stablecoins. The law details the registration process, asset reserve policies, and custody management for stablecoins.

Additionally, the law mandates timely disclosure and financial reporting. It addresses conflicts of interest and relationships with connected third parties and categorizes NFTs as financial or consumer assets.

Notably, DARE 2024 prohibits the issuance of algorithmic stablecoins and privacy tokens and imposes certain restrictions on Proof-of-Work (PoW) token mining activities in the country.

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BitFlyer, one of Japan’s largest crypto exchanges, agreed to acquire the Japanese subsidiary of FTX, the defunct crypto exchange founded by the convicted Sam Bankman-Fried.

FTX Japan was among the several companies impacted by FTX’s collapse in November 2022. Despite the turmoil, FTX Japan maintained that its customers’ assets were separate from FTX’s bankruptcy estate and has repaid its customers as of February 2023.

Crypto custodial move

According to a June 20 statement, bitFlyer aims to reboot FTX Japan as a digital asset custodial firm targeted at institutional investors. It stated:

“[The Company] will provide services related to crypto asset spot ETFs, centered around its core business, if the legal system is established in the future in Japan. [The Company] will continuously maintain the crypto asset exchange service provider and Type 1 financial instruments business license depending on the situation.”

BitFlyer noted that the approval of spot Bitcoin ETFs in the US has increased institutional investors’ entry into the crypto asset market, which needs professional custodial services. It stated:

“Although the [ETF] situation is not necessarily the same in the U.S. and Japan, this trend is expected to increase the need for institutional investors to enter the crypto asset market in Japan, and crypto asset custody services are expected to become more important.”

Following the introduction of spot Bitcoin ETFs in the US, there is speculation that several Asian regulators might follow suit. Hong Kong has already launched crypto ETFs, but Japan is cautious about overcoming the regulatory hurdles for these products.

Nevertheless, BitFlyer said the company would offer services tailored to the needs of financial institutions, including trust banks if Japan establishes a legal framework that supports crypto asset spot ETFs.

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A group of FTX creditors led by Sunil Kavuri has objected to the reorganization plan filed by the defunct exchange’s bankruptcy managers.

According to a June 5 court filing, the creditors argued that the plan failed the best interest test. Justifying the objection, Sunil noted that it is unconfirmable as a matter of law as it includes releases not in the interest of the estate. He added that the plan also ignores property rights issues.

Notably, the creditors argued that FTX’s cash repayment would force a taxable event that could be avoided through in-kind repayment. As such, creditors would be forced to pay tax on declared gains upon the cash receipts. They wrote:

“Because the Debtors state that they will take the position that this ‘forced exchange’ is a taxable event, it will inflict additional hardships on customers through forced taxation that could be avoided by making an ‘in kind’ distribution.”

Kavuri made reference to the current lawsuit against the estate’s law firm, Sullivan & Cromwell, over its ties to the exchange prior to its collapse. He claimed that the plan included an exculpation clause “so they and no one involved [can be] sued for misconduct.”

The creditors further stated that FTX must update the disclosure statement for the Internal Revenue Service (IRS) settlement and include the examiner report. The objection follows a recent agreement to settle tax claims with the IRS.

The settlement plan will see the IRS receive a $200 million priority claim within 60 days after the approval. Additionally, they also receive another $685 million lower-priority claim paid after customers have been fully paid.

On May 7, FTX bankruptcy managers announced a reorganization plan that would see creditors gain full cash repayment. Per the plan, creditors with claims below $50,000 would be eligible for a 118% recovery within 60 days of the court approval.

Similarly, other non-governmental creditors would also receive their total claims with up to 9% interest as compensation.

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The bankrupt FTX estate has unveiled a new reorganization plan that promises substantial returns to its creditors.

FTX creditors with claims below $50,000 would be eligible for a 118% recovery within 60 days of its approval by the Delaware bankruptcy court. Other non-governmental creditors would receive 100% of their claims plus up to 9% interest to account for the time value of their investments.

Meanwhile, provisions exist to settle claims with regulatory bodies such as the IRS and CFTC. The IRS is poised to receive approximately $200 million, while the CFTC’s settlement remains undisclosed.

FTX anticipates that the total value of assets collected and converted to cash for distribution will range between $14.5 and $16.3 billion. The firm achieved this recovery level by monetizing various assets, predominantly proprietary investments from Alameda or FTX Ventures businesses and litigation claims.

John J. Ray III, Chief Executive Officer and Chief Restructuring Officer of FTX, said:

“We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors.”

Not all FTX creditors are satisfied

FTX creditors are expressing discontent with the proposed reorganization plan, highlighting their inability to recover stolen funds at current market rates.

Sunil Kavuri, a notable creditor, raised concerns about Sullivan & Cromwell’s inclusion of an Exculpation clause, shielding them from misconduct allegations such as selling FTX assets at substantial discounts.

Similarly, Mike Belshe, the CEO of BitGo, added:

“0% of FTX creditors agree that receiving $16800 for your Bitcoin is fully compensated. I understand why the bankruptcy process needs to work this way but let’s not pretend victims are getting their money back or that FTX wasn’t as awful as it was.”

However, Bloomberg ETF analyst James Seyffart supported the plan, lauding its moral trajectory despite acknowledging that the figures may not fully restore creditors’ losses. He said:

“Good good GOOD! The numbers won’t equate to FTX creditors just holding onto their assets. But allowing people to get more than 100% of their claim value from the time of bankruptcy is a move in the *Morally Correct* direction.”

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