The administrators of bankrupt cryptocurrency exchange FTX have sold a significant portion of its Solana holdings at a steep discount in a sale that attracted major crypto players, including Galaxy Trading and Pantera Capital.
While the exact figures haven’t been disclosed, the FTX estate is estimated to have offloaded between 25 to 30 million SOL tokens for roughly $64 each, raising up to $1.9 billion, with SOL currently trading at $180 per token, and having remained above the $100 mark for most of this year.
This unprecedented transaction presents a double-edged sword for investors as while there's potential for significant gains if Solana maintains its current price levels, the inherent volatility of the token poses a considerable risk. As Eva Weng, head of investments at crypto market maker Caladan, pointed out, buyers are essentially "exchanging time for a discount" by locking up their capital for four years with the purchased tokens subject to a gradual vesting period.
The deal attracted intense interest, prompting FTX to pause the sale in early March. Among the major players, Galaxy Trading, a subsidiary of Mike Novogratz's Galaxy Digital, reportedly raised $620 million through a dedicated fund that will offer investors staking yield and levy a 1% fee to purchase Solana from FTX.
The 41 million SOL tokens FTX is selling are locked into a predetermined vesting period, meaning they won't be immediately available for trading. This gradual release will take place over the course of four years.
FTX’s co-founder Sam Bankman-Fried, a major SOL proponent, has been sentenced to 25 years in prison last month. FTX’s creditors allege the sale shortchanges them as the judge overseeing the case ruled claim sizes would be based on what customers were owed at the time of FTX’s bankruptcy filing in November 2022.
At the time SOL was trading at $16 a token, which prompted creditors to say that the sale is “giving away money for free to hedge funds.” The FTX estate has maintained its primary goal is to “minimize risk and maximize value for creditors by returning as much cash as possible.”
