FTX creditors are being encouraged to take part in the bankruptcy estate’s planned auction of the remaining Solana token holdings. This move comes after Figure CEO Mike Cagney announced that the upcoming round of locked Solana token sales by FTX will be conducted through an auction process. Unlike before, where the tokens were sold directly to venture capital firms, this auction will allow retail investors impacted by the exchange’s collapse to participate. Sunil Kavuri, a prominent FTX creditor, emphasized the accessibility of the auction, stating that Figure Markets has set up a structure that permits retail FTX creditors to get involved with a minimum investment of $5000, a stark contrast to the $5 million required by FTX.
Figure Markets is establishing a special-purpose vehicle (SPV) for those interested in competing in the auction. The SPV will be open to accredited investors from the US and other countries, subject to a mandatory KYC process. Within the SPV, there will be a community consensus mechanism to determine bid prices and manage subsequent investments. Investors will have the option to contribute in US Dollars, USD Coin stablecoin, Bitcoin, and Ethereum. Despite these arrangements, the defunct exchange has not provided detailed information about the auction process at this point in time.
SOL tokens make up a substantial part of FTX’s crypto holdings, and the exchange has been selling them off at discounted prices. The most recent sale saw FTX realize $1.9 billion by selling SOL at $64 per token, a significant markdown from the current market value. These discounted sales have faced criticism from FTX creditors, who argue that the devaluation of the tokens is detrimental to them. Kavuri expressed dissatisfaction with these actions, highlighting that FTX’s decisions to sell off the tokens have eroded value for the creditors. He further pointed out that legal action is being taken against individuals and entities responsible for the loss in value suffered by FTX creditors.
The upcoming auction of FTX’s remaining Solana token holdings presents an opportunity for creditors to potentially recoup some of their losses. The involvement of retail investors in this auction is a step towards ensuring a fair and transparent process for all parties involved. However, the controversy surrounding the discounted sales of SOL tokens underscores the need for accountability and safeguarding the interests of creditors in such proceedings. It remains to be seen how the auction will unfold and its implications for FTX and its creditors.
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