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In a recent agreement with Luna Foundation Guard (LFG), Avalanche Foundation has decided to reacquire all the AVAX tokens it sold to the former two years ago. Noteworthy, both firms went through with the transaction in April 2022 as part of the cooperation efforts to improve the foundation’s liquidity. LFG used the tokens purchased as reserve assets for its treasury.
In light of the new plan, the Avalanche Foundation has approached the court to request approval for the repurchase process.
Avalanche Foundation Attempts to Salvage AVAX From Luna Bankruptcy Proceeding
Once the approval passes, LFG is compelled to comply with the initial agreement when the tokens are sold to the organization. Avalanche Foundation fears that it would have to liquidate and dump down the AVAX tokens instead of its bankruptcy proceeding. Repurchasing the digital asset is its strategy for avoiding this unfavorable eventuality.
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“This action ensures that LFG would not violate the original agreement’s restrictions on the tokens’ use and shields the tokens from the complexity of a bankruptcy trustee liquidation while returning 1.97M AVAX to the Foundation’s holdings,” the Foundation noted
AVAX Surge by 15%, Reaching For $30
Amidst the wait for the court’s approval, the AVAX price saw a sizable surge of about 15%. Consequently, AVAX inched closer to $30, taking its market cap above $11.5 billion. It has recorded some fluctuations since then and has lost some of the profit made. At the time of this writing, AVAX traded at $28.48 after losing 2.42% of the gain from 24 hours ago.
Though also down by 2.26%, its market cap is still around $11.5 billion. AVAX trading volume is resting at $316.89 million, corresponding with an 18.44% dip in 1 day. The drop in trading volume suggests that traders need to gain more confidence in the potential of the cryptocurrency and its ecosystem.
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FTX to Commence Payout to Creditors
In related bankruptcy news, investors affected by FTX’s 2022 implosion are likely to receive their funds in the next few weeks. They are not only getting back what they were owed but also with added interest. The court has approved a more than $14 billion payout to these entities.
Other traders and investors are concerned about the potential selling pressure the payout will trigger. Alex Thorn, Research Head at Galaxy Digital Holdings, believes these early repayments could positively affect Bitcoin, especially in liquidity-starved markets.
