FTX’s $1.9B SOL Sale Sparks Creditor Outrage: In-Depth Analysis
Solana Liquidation by FTX
According to a recent Bloomberg report, the massive liquidation of Solana (SOL) by the FTX estate has rocked the cryptocurrency world. FTX, now a bankrupt exchange, unloaded over half of its SOL tokens at a 63% discount from current market prices. This resulted in nearly $2 billion for FTX creditors.
Key Players: Galaxy Trading, Pantera Capital, and Neptune Digital Assets
Major entities such as Galaxy Trading, Pantera Capital, and Neptune Digital Assets acquired the majority of FTX's SOL stake, reflecting strong interest from asset managers and venture capitalist firms.
Galaxy Trading facilitated a $620M purchase of SOL tokens from FTX. Pantera Capital raised $250M, and Neptune Digital Assets bought 26,964 SOL tokens at $64 each.
FTX’s $1.9B SOL Sale Sparks Creditor Outrage
FTX's sale of between 25 million and 30 million locked-up SOL tokens at $64 per token has sparked controversy among creditors. They are particularly perturbed considering SOL's current trading price is $176. Critics have accused FTX's liquidators of violating creditors' property rights due to the significant discounts at which the assets were sold.
Impact of FTX's Liquidation Strategy
FTX sold a large portion of its SOL tokens, totaling $1.9 billion. However, these tokens will be locked for four years. The company claims it's to repay creditors, but has received backlash from those affected by the exchange's collapse. Sunil Kavuri, a victim of the collapse, criticized the sale, stating it "destroyed billions of value for FTX creditors."
Crypto Transfers from FTX and Alameda to Exchanges
Recent on-chain data reveals notable cryptocurrency transfers from addresses associated with FTX and Alameda to centralized exchanges, totaling approximately $15 million. The transfers include 1,000 ETH to Coinbase, 1,000 Wrapped Ether (WETH) to Wintermute, and 3,544 Wrapped Binance Coin (WBNB) to Binance.
Detailed Breakdown of Transferred Assets
During the same time frame, addresses tied to the failed exchange moved about $105.9 million worth of 19 different altcoins to intermediary wallets. This was followed by roughly $16 million in 13 different assets deposited to centralized exchanges. The transactions primarily involved GateChain's 3.17 million GT tokens, valued at around $31.3 million, along with significant transfers of LEO and VIC tokens, among others.
Legal Consequences for Former FTX CEO
Sam Bankman-Fried, the former CEO of FTX, was recently sentenced to 25 years in prison on fraud charges related to the exchange's collapse in November 2022. Creditors have initiated a class action lawsuit against Sullivan and Cromwell, accusing them of being involved in the fraud prior to representing FTX during bankruptcy proceedings.
