Oct 2, 2024
6thTrade
The FTX estate is preparing to auction off 22.3 million locked Worldcoin (WLD) tokens, valued at approximately $37.7 million, at a substantial discount, according to three sources with direct knowledge of the situation speaking to The Block. This sale is part of the estate's ongoing initiative to recover funds for its creditors. $WLD
Interested parties must submit their bids for the WLD token sale by 8 PM ET on Wednesday, two of the sources indicated. Successful bidders will be notified by Thursday if their bids are accepted. The discount for the WLD tokens could range from 40% to 75% below the current market price of WLD, which is trading at around $1.69, according to the same sources.
The FTX estate’s holding of 22.3 million WLD tokens will be sold entirely through this auction, meaning no further auctions for these tokens will occur, the sources added.
The tokens are set to unlock gradually, extending through 2028. Specifically, 20,539 WLD tokens will be unlocked daily from December 1, 2024, to July 24, 2026. Thereafter, 13,689 WLD tokens will unlock daily from July 25, 2026, to July 24, 2028.
However, the length of these lockup periods has raised concerns among some observers. One of the original three sources, as well as an additional fourth source, expressed worries about the impact of these long lockup periods on the attractiveness of the tokens to potential buyers.
Earlier this week, Figure Markets co-founder and CEO Mike Cagney confirmed on X (formerly Twitter) that the FTX estate is auctioning its WLD token holdings at a potential discount of up to 75%. He also reiterated that the WLD tokens will unlock gradually through 2028. Cagney mentioned that Figure Markets might establish a fund to participate in the auction, akin to what the firm did for the FTX estate's Solana (SOL) auction earlier in the year.
The FTX estate has previously conducted similar sales involving other tokens. In May, it concluded the sale of $7.5 billion worth of Solana tokens, which were sold at a discount and attracted major investors, including Pantera Capital. More recently, last month, multiple crypto funds, including Pantera Capital and ParaFi Capital, purchased 62.6 million Metaplex (MPLX) tokens from Wave Digital Assets, which had originally been held by the FTX estate.
Following these major token sales, the FTX estate now holds roughly $594 million in assets, based on data from Arkham. However, a significant portion of these assets—around $541 million—is in FTX's FTT token. Due to its illiquidity, the estate has effectively marked the FTT tokens to zero, suggesting they may not be sold.
Disclaimer: The content of this article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are highly volatile and may lead to substantial financial loss. Always perform your own research and consult a qualified financial advisor before making any investment decisions. The opinions expressed are solely those of the author and do not represent the views of the publisher or its affiliates. Investing in cryptocurrencies involves inherent risks, and past performance is not a reliable indicator of future results. Please exercise caution.
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