FTX Sells Off Solana (SOL) to Raise $2 Billion for Creditors, Sparking Outrage
A recent report from Bloomberg has sent shockwaves through the cryptocurrency community, as it exposed a significant sell-off of Solana (SOL) tokens by the bankrupt FTX exchange. FTX managed to raise nearly $2 billion for its creditors by selling over half of its SOL tokens at a staggering 63% discount from current market prices.
This sell-off attracted the attention of major players in the investment industry, including Galaxy Trading, Pantera Capital, and Neptune Digital Assets. Galaxy Trading acquired an impressive $620 million worth of SOL tokens, while Pantera Capital invested $250 million. Neptune Digital Assets also joined in, purchasing 26,964 SOL tokens at a rate of $64 each.
However, FTX’s decision to sell a significant number of locked-up SOL coins at a price of $64 each has sparked controversy. With SOL’s current trading price at $176, concerns have been raised about potential losses, leading to accusations of property rights violations against FTX’s liquidators. Critics argue that selling the assets at such a significant discount disadvantages creditors and has fueled dissatisfaction among those affected by the exchange’s downfall.
Another point of contention is FTX’s decision to lock up a substantial portion of SOL tokens for four years. While this move is reportedly intended to repay creditors, it has faced widespread criticism. Sunil Kavuri, one of the victims, criticized the sale for “destroying billions of value for FTX creditors.”
Recent on-chain data sheds light on the movement of assets associated with FTX and Alameda. Notable transfers include 1,000 ETH to Coinbase, 1,000 Wrapped Ether (WETH) to Wintermute, and 3,544 Wrapped Binance Coin (WBNB) to Binance, with a total value of approximately $15 million. These transactions indicate significant activity amid the chaos.
Further investigation reveals that addresses linked to the troubled exchange moved around $105.9 million worth of 19 different altcoins to intermediary wallets. Subsequently, approximately $16 million across 13 different assets made their way into centralized exchanges. Notable transactions involved the transfer of 3.17 million GT tokens from GateChain, valued at about $31.3 million, as well as significant transfers of LEO and VIC tokens, among others.
In addition to the sell-off and asset movements, the former CEO of FTX, Sam Bankman-Fried, has recently been 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.