The FTX bankruptcy estate has initiated a significant move by selling 41 million locked Solana (SOL) tokens, valued at a staggering $7.5 billion. This sale, as reported by The Block, has been facilitated by Galaxy Asset Management, an affiliate of Galaxy Digital Holdings, and has attracted substantial attention from institutional investors and various funds.
The sale comes at a time when the cryptocurrency market is closely watching the aftermath of FTX’s collapse. With the tokens being sold at a considerable discount, the transaction has sparked debates on the strategic nature of the sale and its implications for both the creditors and the broader crypto ecosystem.
Neptune Digital, a Canadian crypto infrastructure firm, has publicly announced its strategic acquisition of 26,964 SOL at a price of $64 per token, representing a 67% discount to the market value at the time. This move by Neptune Digital is indicative of the interest from companies in acquiring Solana tokens at discounted rates. The terms of the sale include a vesting period, with 20% of the tokens to be released in March 2025 and the remainder on a linear release schedule until January 2028.
The sale has not been without controversy. FTX creditor Sunil Kavuri, while addressing the court during former CEO Sam Bankman-Fried’s sentencing hearing, expressed grievances over the handling of the bankruptcy estate’s proposed repayments. Kavuri, along with other creditors, has argued that the tokens should have been distributed at their current market value rather than at the price at the time of FTX’s bankruptcy filing.
This sentiment is echoed in victim impact statements submitted to the U.S. Department of Justice, where several creditors have criticized Sullivan and Cromwell, the FTX bankruptcy estate counsel, for their approach to the repayment plan.
Despite the contention, the demand for the locked Solana tokens remains high. Galaxy Trading, an affiliate involved in the bidding process, has been raising funds from investors to make larger bids for the estate’s locked SOL holdings. The fund, which allows investors to participate at $64 per token, has a management fee of 1%, with BitGo acting as the custodian of the tokens.
The sale has also seen its share of operational challenges. Some allocations agreed with Galaxy Trading were reportedly reduced by 13% when the deals closed, a decision attributed to the FTX estate’s final say on distributions.
Other funds, such as Pantera and FalconX, have also shown interest in the locked Solana tokens, with Pantera reportedly raising money to create a fund to purchase up to $250 million worth of tokens. However, Phoenix Digital’s bid did not go through, highlighting the competitive nature of the process.
In addition to Solana, Galaxy Asset Management is also selling 42 other tokens, primarily based on Solana and Ethereum, with a total value of around $211 million. This includes significant amounts of gatetoken, atlas, shadow token, and Bitfinex’s token, unus sed leo.
The FTX estate’s decision to sell the locked Solana tokens at a discount has been a strategic move to manage the bankruptcy proceedings and provide a form of repayment to the creditors. While the sale has been met with criticism from some creditors, it has also been seen as an opportunity by investors to acquire Solana tokens at a favorable price, potentially signaling confidence in the future of the Solana ecosystem.
When the cryptocurrency community continues to navigate the complexities of the FTX bankruptcy, the sale of the locked Solana tokens acts as a reminder of the volatile and ever-evolving nature of the crypto market. The outcome of this sale will likely have lasting implications for the involved parties and could set a precedent for future bankruptcy proceedings within the industry.
