Home CryptocurrencyAltcoin Mass Liquidation of SOL by FTX Estate Raises Nearly $2 Billion

Mass Liquidation of SOL by FTX Estate Raises Nearly $2 Billion

by SuperiorInvest

FTX equity offloaded more than half of its Solana (SOL) tokens at a 63% discount to current prices, according to an April 5 Bloomberg report. SOL tokens represent the majority of the bankrupt exchange's assets.

The sale received interest from asset managers and venture capitalists, including Galaxy Trading and Pantera Capital, people familiar with the matter told Bloomberg.

The bankrupt exchange sold between 25 and 30 million locked SOL coins at $64 per token, generating around $1.9 billion for FTX's creditors. FTX was one of the first investors in Solana. Its 41 million SOL tokens are subject to a four-year vesting schedule, meaning they cannot be traded on the market until the deadline passes.

According to CoinMarketCap, the SOL token is trading at $176 at the time of writing, recording an impressive 743% gain over the past 12 months, driven by the recovery of crypto markets and the rise of memecoins.

SOL token performance over 12 months. Source: CoinMarketCap

Galaxy Trading, a division of Mike Novogratz's Galaxy Digital, reportedly raised approximately $620 million for the purchase of SOL tokens from FTX's estate. Investment in the fund will generate a 1% management fee. According to sources, the fund also seeks to generate returns for its investors through its bets. Galaxy Asset Management, another branch of Galaxy Digital, assisted the exchange in selling its assets.

Pantera Capital also raised $250 million to buy SOL tokens from FTX's estate, Bloomberg said. Neptune Digital Assets, a Canadian blockchain company, acquired 26,964 SOL tokens for $64 each on March 27.

FTX's sale of assets at a deep discount has sparked criticism from the exchange's creditors.

On March 28, former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison on fraud charges stemming from the exchange's collapse in November 2022. During his sentencing, creditors accused the exchange's liquidators of violating the “property rights” of the creditor.

“They have liquidated billions of dollars in crypto assets. There is an S&C token [Sullivan & Cromwel] sold for 11 cents; It is now trading at two dollars. FTX had $10 billion [misprint] in Solana tokens – they sold them at a 70% discount,” said FTX creditor Sunil Kavuri.

FTX creditors have filed a class-action lawsuit against Sullivan and Cromwell, alleging that the company engaged in fraud before representing the exchange during bankruptcy proceedings.

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