The bankruptcy estate of FTX, alongside its affiliated trading firm Alameda Research, continues its systematic liquidation of assets, with a significant focus on Solana (SOL) holdings. These ongoing redemptions are a critical component of the estate's strategy to repay creditors following the exchange's dramatic collapse, an event that sent ripple effects across the global cryptocurrency market. The methodical approach seeks to balance asset recovery with minimizing market disruption, a delicate task under intense scrutiny.
Recently, the estate executed another substantial redemption, withdrawing approximately 192,000 SOL tokens from staking positions. Valued at roughly $44.9 million at the time of redemption, these tokens are anticipated to be distributed across multiple wallets before ultimately being transferred to major exchanges like Coinbase or
Binance for sale. This action is consistent with previous liquidation efforts, indicating a structured process for monetizing digital assets to fulfill financial obligations.
Liquidation Strategy and Market Impact
Since November 2023, the FTX-Alameda staking address has redeemed and transferred a total of 8.98 million SOL, generating approximately $1.2 billion based on an average sale price of $134 per SOL. The estate still holds a substantial 4.18 million SOL, currently valued at around $977 million, under its control within staking protocols. A significant portion of these remaining tokens is subject to a four-year vesting schedule, compelling the estate to sell them gradually. To manage these large blocks of assets, sales are often conducted through private auctions at discounts to prevailing market prices, with institutional players such as Galaxy Digital and Pantera Capital participating as buyers.
Despite these large-scale liquidations,
Solana's market price has shown remarkable resilience. According to data from
CoinGecko, the token recently climbed 6.2% within a 24-hour period to reach $237.71. Over the preceding week, Solana demonstrated an even stronger performance, gaining more than 14% from its weekly low of $199. This market behavior suggests that, thus far, the structured release of FTX's SOL holdings has not exerted significant negative pressure on the asset's valuation, possibly due to the controlled nature of the sales and robust market demand.
Creditor Repayments and Legal Challenges
The estate's primary objective remains the repayment of creditors. After securing court approval for its redistribution plan earlier this year, FTX has already returned approximately $6.2 billion to customers through two prior distributions: $1.2 billion in February and a further $5 billion in May. The next round of creditor payouts is scheduled for September 30, with BitGo,
Kraken, and Payoneer designated as distribution partners to facilitate these transactions. The exact size of this upcoming distribution has not yet been disclosed.
The ongoing liquidation and repayment efforts stem from the dramatic implosion of FTX in November 2022. Once the world's third-largest cryptocurrency exchange by trading volume, FTX faced a liquidity crisis triggered by a rush of customer and investor withdrawals, leading to its insolvency and subsequent bankruptcy filing in the United States. Founder and chief executive Sam Bankman-Fried was convicted of defrauding customers and investors of over $11 billion in 2023 and is currently serving a 25-year prison sentence.
The legal fallout from FTX's collapse continues to unfold. In a recent development, joint liquidators for the failed hedge fund Three Arrows Capital (3AC), Russell Crumpler and Christopher Farmer, have filed a legal notice with the US Bankruptcy Court for the District of Delaware. They seek to depose Bankman-Fried under Rule 45 of the Federal Rules of Civil Procedure, accusing him of improperly liquidating $1.5 billion of 3AC's positions without proper justification. Additionally, former FTX executive Ryne Salame faces accusations of utilizing insider information to front-run trades against customer positions, allegedly allowing him to cash out more than $1 billion before the exchange's demise. These legal battles underscore the complexity and wide-ranging implications of FTX's downfall.