Massive SOL liquidation by FTX estate nets nearly $2B

The FTX estate unloaded over half of its Solana (SOL) tokens at a 63% discount from current prices, according to a Bloomberg report on April 5. 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 million and 30 million locked-up SOL coins at $64 a token, generating around $1.9 billion for FTX creditors. FTX was an early investor in Solana. Its 41 million SOL tokens are subject to a four-year vesting schedule, meaning they cannot be traded in the market until the deadline passes.

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

Galaxy Trading, a division of Mike Novogratz’s Galaxy Digital, reportedly raised roughly $620 million for the purchase of SOL tokens from the FTX estate. Investing in the fund will incur a 1% management fee. The fund also seeks to generate returns for its investors from staking, according to the sources. Galaxy Asset Management, another branch of Galaxy Digital, assisted the exchange in the sale of its assets.

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

The sale of FTX assets at a steep 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 charges of fraud stemming from the exchange’s collapse in November 2022. During his sentencing, creditors accused the exchange’s liquidators of violating the creditor’s “property rights.”

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

Creditors of FTX have filed a class action against Sullivan and Cromwell, alleging that the firm participated in the fraud before representing the exchange during bankruptcy proceedings.