FTX Creditors Encouraged to Bid on Remaining Solana Holdings in Open Auction

FTX creditors are encouraged to participate in the upcoming auction of the exchange's remaining Solana (SOL) tokens. CEO Mike Cagney revealed the tokens would be sold via auction, allowing retail investors to participate with a minimum investment of $5000. The auction will be conducted through a special purpose vehicle (SPV) created by Figure Markets, which will facilitate community consensus on bid prices and investment decisions.

FTX Creditors Urged to Participate in Auction of Exchange's Remaining Solana Holdings

Bankruptcy Estate to Host Auction for SOL Tokens

April 20, 2023 - Figure CEO Mike Cagney has announced that the next phase of FTX's asset liquidation will involve an auction of the exchange's remaining Solana (SOL) tokens. Unlike previous sales, which were conducted directly with venture capital firms, this auction will be open to both accredited US and non-US investors who meet KYC requirements.

Retail Investors Encouraged to Participate

Sunil Kavuri, a prominent FTX creditor, has strongly encouraged retail investors affected by the exchange's collapse to participate in the auction. Through Figure Markets, they have established a special-purpose vehicle (SPV) to facilitate this involvement with a minimum investment of $5,000, significantly lower than the $5 million threshold for direct purchases from FTX.

Community-Driven Bidding and Investment Management

The SPV will utilize a community consensus mechanism to determine bid prices and subsequent investment management decisions. It will accept investments in US dollars, USD Coin (USDC) stablecoins, Bitcoin (BTC), and Ethereum (ETH).

FTX's History of Discounted SOL Sales

The auction of FTX's SOL holdings comes amidst ongoing criticism from creditors regarding the exchange's previous discounted sales of the tokens. FTX has been actively divesting its SOL holdings at rates significantly below the current market value, raising concerns about value destruction.

Creditors' Concerns and Legal Action

Kavuri has expressed discontent with the exchange's handling of the SOL sales, stating that it has "destroyed" value for creditors. He and other creditors are pursuing legal action through class actions against Sullivan & Cromwell and co-conspirators for the destruction of value.

Significance of SOL Holdings

SOL tokens represent a substantial portion of FTX's crypto assets, making their sale a critical component of the bankruptcy process. Maximizing the value of these assets is crucial for compensating creditors and potentially recovering some of the losses incurred during the exchange's collapse.

Auction Details and Timeline

As of press time, FTX has not released additional details on the auction process, including the timeline and specific procedures. Investors interested in participating are advised to monitor official announcements from Figure Markets or the FTX bankruptcy estate.

FTX's Ongoing Bankruptcy Proceedings

The auction of SOL tokens is part of FTX's ongoing bankruptcy proceedings, which are expected to be a lengthy and complex process. The exchange continues to engage in legal battles and face investigations as it attempts to navigate through the aftermath of its collapse.