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FTX and Alameda Research Continue Solana (SOL) Liquidations Amid Ongoing Creditor Repayment Processes
The troubled cryptocurrency exchange FTX and its sister trading firm Alameda Research have further intensified their efforts to access liquidity by unstaking Solana (SOL) holdings to meet creditor repayments. Following a series of similar liquidations, the FTX Foundation recently unstaked approximately 192,000 SOL – a stake valued at $44.9 million as of current market prices. These assets, according to reports from Cryptopolitan dated November 12, will likely be distributed across multiple wallets and subsequently sent to major exchanges like Coinbase or Binance for liquidation.
Solana (SOL) Liquidations Reach Nearly $9 Million Tokens, Valued at $1.2 Billion
Cumulative data from Solana Explorer indicates that since November 2023, FTX and Alameda-associated wallets have liquidated approximately 8.98 million SOL, totaling an estimated $1.2 billion in value. Despite these significant transactions, the FTX Foundation still retains approximately 4.18 million SOL in staked holdings, which are currently valued at $977 million. Notably, a considerable portion of these assets remains locked under a four-year vesting schedule.
Rather than opting for public market liquidation, the foundation has demonstrated a preference for private auction sales, targeting institutional investors such as Galaxy Digital and Pantera Capital. Significantly, these transactions are being executed at below-market rates, reflecting the foundation’s strategy of expediting liquidity while mitigating potential adverse impacts on market conditions.
Limited Impact on Solana’s Price Stability
Despite the sheer scale of these liquidations, Solana (SOL) has shown remarkable price resilience. As of this writing, SOL trades at $239.01, reflecting a 24-hour increase of 6.2% and a weekly gain of 15%. This stability underscores Solana’s robust ecosystem and sustained investor interest, even amid substantial offloading by major wallets connected to FTX and Alameda Research.
Advances in Creditor Repayment Efforts
The ongoing SOL liquidations are part of a broader effort by FTX to facilitate repayments to its creditors. The next scheduled distribution will occur on September 30, though the specific amount to be disbursed remains undisclosed. The repayment process is being administered by specialists, including BitGo, Kraken, and Payoneer, who aim to ensure transparency and efficiency in asset liquidation and fund distribution.
Earlier this year, FTX successfully completed two repayment rounds – disbursing $1.2 billion in February, followed by an additional $5 billion in May – bringing the total funds returned to creditors to $6.2 billion to date.
The Fallout from FTX’s Collapse and Legal Developments
FTX’s meteoric bankruptcy filing in November 2022 remains a defining moment in the cryptocurrency industry. Once the third-largest cryptocurrency exchange globally by trading volume, the platform faced a liquidity crisis triggered by mass withdrawals. The company’s founder, Sam Bankman-Fried, was subsequently convicted of perpetrating an $11 billion fraud scheme and is now serving a 25-year sentence in an Oklahoma correctional facility.
The legal proceedings surrounding FTX’s collapse continue to unfold. In a related development, liquidators of the defunct hedge fund Three Arrows Capital (3AC) recently filed a subpoena with the Delaware Bankruptcy Court to secure testimony from Bankman-Fried. Key among the allegations is an accusation from Zhu Su, 3AC’s co-founder, claiming that FTX improperly liquidated $1.5 billion worth of positions without proper justification.
Further complicating the legal quagmire are allegations directed at Ryan Salame, a former FTX executive. Salame faces claims of insider trading, where he reportedly placed counter trades against customer positions, netting over $1 billion in alleged illicit profits.
Broader Implications for the Crypto Ecosystem
The case of FTX underscores the critical importance of transparency, governance, and compliance in crypto institutions. As creditors await further distributions and legal cases continue to unravel, the industry remains on alert for long-term regulatory implications.
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