The Controversial Sale of FTX’s Solana Holdings

The recent decision by the bankrupt crypto exchange, FTX, to sell its Solana holdings at a discount to crypto venture firms has sparked strong disapproval from creditors. The sale, which involved offloading 30 million SOL at a rate of $64 each to VC firms like Pantera Capital and Galaxy Trading, represents a significant 62% markdown from the current market price of $176. While the transaction is expected to fetch FTX about $1.9 billion and is positioned as a step towards repaying creditors, those affected by the exchange’s collapse have expressed negative sentiments towards the deal.

Sunil Kavuri, one of the victims of FTX’s downfall, lamented that the sale “destroyed billions of value for FTX creditors.” He accused the firm’s bankruptcy lawyers, Sullivan & Cromwell, of prioritizing their clients over the creditors by disposing of what he believes is creditors’ property. Kavuri’s critique is echoed by others impacted by FTX’s collapse, who have raised concerns over the exchange’s recurrent liquidation of customers’ digital assets within the ongoing bankruptcy proceedings.

On-chain data reveals that addresses associated with FTX and Alameda have transferred approximately $15 million worth of crypto to centralized exchanges. These transactions include 1,000 ETH to Coinbase, 1,000 Wrapped Ether (WETH) to Wintermute, and 3,544 Wrapped Binance Coin (WBNB) to Binance. During the week, addresses of the failed exchange moved around $105.9 million worth of 19 different altcoins to two intermediary wallets. Subsequently, approximately $16 million in 13 different assets were deposited to centralized exchanges. Blockchain analytics firm SpotOnChain reported that GateChain’s 3.17 million GT tokens, valued at about $31.3 million, dominated the transactions. Additionally, 3.37 million LEO tokens worth $20.4 million and 16.9 million VIC tokens worth $16.7 million were transferred. The remaining $37.6 million was distributed among 16 other little-known digital assets.

The controversial sale of FTX’s Solana holdings has not been well-received by creditors and victims of the exchange’s collapse. The decision to sell the SOL at a significant discount to crypto venture firms has raised concerns about the treatment of creditors and the handling of digital assets within the bankruptcy proceedings. As FTX continues to divest its digital assets, the impact on creditors and stakeholders remains a point of contention in the ongoing saga of the bankrupt crypto exchange.