Nearly two-thirds of FTX’s Solana (SOL) holdings have been purchased by Galaxy Trading, Pantera Capital, and Neptune Digital Assets, marking a significant sale from the estate of the now-bankrupt cryptocurrency exchange. This divestiture of SOL tokens, which formed a substantial portion of FTX’s assets, was carried out at a 63% markdown from their current market value, as reported by Bloomberg on April 5. The tokens, essential to FTX’s investment portfolio, were sold to a mix of asset managers and venture capital firms, attracting notable names like Galaxy Trading and Pantera Capital.
In a strategic move to reimburse FTX’s creditors, the exchange offloaded between 25 million and 30 million of its SOL tokens, priced at $64 each, thereby amassing around $1.9 billion. FTX’s engagement with Solana dates back to its inception, holding a vested interest of 41 million SOL tokens on a four-year schedule, limiting their market circulation until the vesting period concludes.
At the time of reporting, SOL’s market price stood at $176 according to CoinMarketCap, reflecting a staggering 743% increase over the previous year. This surge is attributed to the broader recovery of the cryptocurrency market and a notable interest in meme-based digital currencies.
Galaxy Trading, under the umbrella of Galaxy Digital led by Mike Novogratz, managed to secure approximately $620 million for the acquisition of SOL tokens from FTX’s assets. Investors in this fund are subject to a 1% management fee, with the fund aiming to leverage staking for additional returns, as per insider sources. Galaxy Asset Management played a pivotal role in facilitating the asset sale process for the exchange.
Meanwhile, Pantera Capital successfully gathered $250 million to invest in SOL tokens from the FTX estate, and Neptune Digital Assets, a Canadian blockchain firm, purchased 26,964 SOL tokens at $64 per token on March 27.
The substantial discounts on FTX’s asset sales have been met with criticism from the exchange’s creditors, raising concerns over the management of the liquidation process. This sentiment was echoed in the wake of Sam Bankman-Fried, FTX’s former CEO, receiving a 25-year prison sentence for fraud related to the exchange’s downfall in November 2022. Creditors have criticized the liquidation strategy for allegedly infringing upon their rights, citing significant discrepancies in the sale prices of tokens compared to their current market values.
The controversy has further escalated with a class action lawsuit against Sullivan and Cromwell, accusing the firm of complicity in the fraud leading up to FTX’s bankruptcy and questioning its role in representing the exchange during the proceedings.
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