FTX Bankruptcy Auction Draws Crypto Giants for $6.3 Billion Locked Solana Tokens

FTX's bankruptcy estate is preparing to auction off a second batch of Solana (SOL) tokens, estimated to be worth billions of dollars. Large crypto investment firms, including Pantera Capital, are expressing interest in the auction. The estate previously sold $1.9 billion worth of SOL at $60, with the tokens now trading at over $150. Despite concerns from opposing creditors, FTX plans to auction the tokens, leaving the price to be determined by competing investors.

FTX Bankruptcy Estate to Auction Massive Batch of Locked Solana Tokens, Drawing Interest from Crypto Giants

New York, USA - The bankruptcy estate of the collapsed crypto exchange FTX is preparing to auction a second batch of Solana (SOL) tokens worth billions of dollars, attracting the attention of several крупных криптовалютных инвестиционных фирм. This follows a successful previous sale of SOL tokens valued at $1.9 billion through Galaxy Digital, where investors acquired the tokens for approximately $60 each. Solana has since experienced a significant surge in price, currently trading above $150.

Substantial Solana Holdings

FTX holds a substantial 41 million locked Solana tokens, estimated to be worth approximately $6.341 billion at current market prices. In March 2024, the exchange's bankruptcy estate reportedly sold around 30 million tokens at $64 each, generating close to $2 billion.

At the time of that sale, SOL was trading at $174, representing a discount of approximately 63%. However, these tokens are locked and were issued to FTX as part of its investment in Solana Labs. This means that the purchasers of these tokens will not be able to sell them for several months.

Calculated Risk, Potential Rewards

Purchasing locked tokens carries inherent risk, as their value could potentially decline significantly during the lock-up period. However, investors are betting on Solana's continued growth trajectory. Those who purchased the tokens at $64 during the previous sale have already realized a substantial profit on paper, with SOL currently trading at over $150.

Auction Format

In contrast to the previous sale, FTX has decided not to set a fixed price for the upcoming SOL auction. This move aims to maximize revenue by allowing investors to compete and drive up the price. The decision is likely influenced by the high demand for FTX's Solana stash, with major investment firms expressing interest.

Pantera Capital's Ambitious Plan

Among the interested parties is Pantera Capital, which plans to raise $250 million to participate in the auction. Figure Markets is also seeking to compete, announcing the launch of a special purpose vehicle (SPV) to pool investor funds for the purchase. In the US, the SPV is exclusively available to accredited investors, while non-US retail investors can participate freely.

Creditor Objections

FTX creditors, who suffered significant losses during the exchange's collapse, have expressed concerns about the upcoming sale. They allege that Sullivan & Cromwell, the bankruptcy firm handling FTX's estate, is abusing its power by colluding with Galaxy Digital to sell the tokens at a discount to the firm's clients.

Sunil Kavuri, a vocal creditor, has criticized the sale process, stating that Sullivan & Cromwell is "adamant in selling FTX creditors' locked Solana at a heavy discount to their own clients (Galaxy), despite our objections."

Kavuri has, however, endorsed Figure Markets' efforts to pool resources from retail investors for the purchase. He noted that the SPV allows investors to participate with a minimum investment of $5,000, compared to the previous minimum of $5 million.

Solana's Price Performance

At the time of writing, Solana is trading at $152.09, representing a gain of 1.57% over the past 24 hours. The token has experienced notable price appreciation since the beginning of the year, reflecting the broader recovery in the crypto market.

The upcoming auction of FTX's Solana tokens is expected to be fiercely contested, with investors eager to acquire a stake in the promising blockchain platform. The outcome of the auction will shed light on the ongoing demand for crypto assets and the broader market sentiment.