FTX Estate to Sell 22.3M Locked Worldcoin Tokens at a Discount

Highlights:

• FTX estate will auction 22.3 million WLD tokens valued at approximately $33.7 million.
• Bids are due by 8 PM on October 3, with a minimum bid of $2.5 million.
• This auction represents the final opportunity to buy WLD tokens before unlocking begins.

The FTX estate plans to auction 22.3 million locked Worldcoin (WLD) tokens, valued at around $33.7 million. The sale is part of the estate’s continuous effort to recover funds for its creditors. This auction is likely to draw significant interest, as the tokens will be sold at a discount of 40% to 75% off the current market price of $1.69 per token. 

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Investor bids must be submitted by 8 PM on October 3, with a minimum bid of $2.5 million required to participate in the auction. This also offer a chance for buyers to acquire all 22.3 million tokens at once.

Scoop: @FTX_Official estate prepares to sell 22.3 million locked @worldcoin tokens, currently worth around $38 million, at a discounthttps://t.co/etV7xjrpMi

— Yogita Khatri (@Yogita_Khatri5) October 2, 2024

Lengthy Unlock Period for WLD Tokens

It was revealed that the unlocking will commence on December 1st, with 20,539 tokens released daily until July 24, 2026. Following that, 13,689 tokens will begin unlocking from July 25, 2026, to July 24, 2028. The estate has stated that this will be the final auction of WLD tokens, meaning there will be no further opportunities to purchase these assets at a discount.

The extended lockup period has raised concerns among potential buyers regarding risks and delayed liquidity. However, the chance to purchase at such significant discounts may still draw interest from investors, especially those aiming for long-term gains.

FTX Estate’s Final Push to Recover Funds Amid Bankruptcy Fallout

The FTX estate has a history of selling assets at significant discounts after its bankruptcy. The company collapsed in 2022 when an $8 billion deficit was uncovered in its accounts. In March, CEO Sam Bankman-Fried was sentenced to 25 years in prison for fraud and the misuse of customer funds. Since then, the company has been working to recover funds for creditors.

Earlier this year, the estate auctioned off $1.9 billion worth of SOL at $64 per token. This price represented a 68% discount from the market rate.

The FTX estate currently holds approximately $594 million in assets, primarily consisting of FTX’s native token, FTT. The estate has stated that this token is largely non-liquefiable and has been marked down to zero. This auction could be one of the final significant efforts by the estate to recover funds for its creditors, as fewer tokens remain for future sales.

On September 29, rumors circulated that FTX would start distributing funds to creditors and customers on September 30. However, these rumors were unfounded, as the court hearing to confirm the reimbursement is scheduled for October 7.

The FTT token has seen incredible growth due to … fake news.

FTT is the token of the bankrupt @FTX_Official exchange. Over the course of 24 hours, it grew by more than 50%.

The reason was the spread of false information that compensation for affected customers would begin… pic.twitter.com/LegtFZzuwh

— TU_Crypto_News (@TU_Crypto_News) September 30, 2024

Auction Discounts Could Undercut WLD Price and Trigger Sell-Offs

This substantial discount raises the possibility of undercutting the token’s spot price, as auction buyers would acquire WLD tokens at a much lower cost than on the open market. This could result in sell-offs once the tokens become liquid, potentially driving the price down further. WLD has dropped 9% in the past 24 hours and may continue to decline due to the upcoming FTX estate token auction.

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