FTX Dumps Solana (SOL) to Secure $2 Billion for Creditors, Sparks Outrage

A recent report from Bloomberg has shaken the cryptocurrency world, revealing a huge sell-off of Solana (SOL) by the bankrupt FTX exchange. Selling more than half of its SOL tokens at a whopping 63% discount from current market prices, FTX managed to rake in nearly $2 billion for its creditors.

Read on to find out the who, what, why, and why this matters for the future of Solana.

Big Players Step In

In the midst of this chaos, big names in the investment sphere such as Galaxy Trading, Pantera Capital, and Neptune Digital Assets seized the opportunity to acquire significant amounts of FTX’s SOL stake. Galaxy Trading secured an impressive $620 million worth of SOL tokens, while Pantera Capital invested $250 million. Neptune Digital Assets also got in on the action, purchasing 26,964 SOL tokens at a rate of $64 each.

So, what’s the controversy about?

However, FTX’s decision to sell between 25 to 30 million locked-up SOL coins at $64 each has sparked controversy. With SOL’s current trading price sitting at $176, concerns about potential losses have arisen, leading to accusations of property rights violations against FTX’s liquidators. Critics argue that selling the assets at such significant discounts disadvantages creditors, fueling dissatisfaction among those affected by the exchange’s downfall.

Four-Year Wait for Redemption?

Despite the hefty sum of $1.9 billion earned from the sale, FTX’s move to lock up a significant portion of SOL tokens for four years has stirred further controversy. While the intention is reportedly to repay creditors, the decision has faced widespread criticism from victims like Sunil Kavuri, who criticized the sale for “destroying billions of value for FTX creditors.”

Also Read: Crypto Market Prediction: Cardano (ADA), XRP, and Solana (SOL) to Hit $1 Trillion Market Cap?

Understanding Asset Movements

Recent on-chain data sheds light on cryptocurrency movements associated with FTX and Alameda. Notable transfers totaling approximately $15 million include 1,000 ETH to Coinbase, 1,000 Wrapped Ether (WETH) to Wintermute, and 3,544 Wrapped Binance Coin (WBNB) to Binance. These transactions hint at significant activity amidst the turmoil.

Further investigation reveals addresses linked to the troubled exchange moving around $105.9 million worth of 19 different altcoins to intermediary wallets. Subsequently, approximately $16 million across 13 different assets found their way into centralized exchanges. Notable transactions involve GateChain’s 3.17 million GT tokens, valued at about $31.3 million, alongside significant transfers of LEO and VIC tokens, among others.

Fried Meets His Fate

Furthermore, the former CEO of FTX, Sam Bankman-Fried, was recently sentenced to 25 years in prison on fraud charges related to the exchange’s collapse in November 2022. Creditors have filed a class action against Sullivan and Cromwell, alleging their involvement in the fraud before representing FTX during bankruptcy proceedings. 

Read More About This: The Final Chapter of FTX Saga: Sam Bankman-Fried Sentenced to 25 Years

FTX’s SOL selloff: genius move or epic fail?