FTX Bankruptcy Fallout: Creditors Disapprove Sale of Solana Holdings

FTX Bankruptcy Fallout: Creditors Disapprove Sale of Solana Holdings

The decision by the bankrupt crypto exchange FTX to sell its Solana holdings at a significant discount to crypto venture firms has been met with strong disapproval from creditors. Reports have surfaced revealing that FTX sold as much as 30 million SOL at a rate of $64 each to VC firms like Pantera Capital and Galaxy Trading. This represents a substantial 62% markdown from the current market price of around $176. The transaction, expected to bring in $1.9 billion for FTX, is aimed at repaying creditors. However, those affected by the exchange’s collapse view the deal negatively.

Sunil Kavuri, one of the victims of FTX’s bankruptcy, lamented that the sale “destroyed billions of value for FTX creditors.” He accused the firm’s bankruptcy lawyers, Sullivan & Cromwell, of prioritizing their clients over the creditors by disposing of what he believes belongs to the creditors. This sentiment is echoed by others impacted by FTX’s downfall, who have raised concerns over the exchange’s recurring liquidation of customers’ digital assets within the ongoing bankruptcy proceedings.

On-chain data shows that addresses associated with FTX and Alameda have transferred approximately $15 million worth of crypto to centralized exchanges. These transactions include 1,000 ETH to Coinbase, 1,000 Wrapped Ether (WETH) to Wintermute, and 3,544 Wrapped Binance Coin (WBNB) to Binance. During the week, the addresses of the failed exchange moved around $105.9 million worth of 19 different altcoins to two intermediary wallets. Subsequently, approximately $16 million in 13 different assets were deposited to centralized exchanges.

According to blockchain analytics firm SpotOnChain, GateChain’s 3.17 million GT tokens, valued at about $31.3 million, dominated the transactions. Additionally, 3.37 million LEO tokens worth $20.4 million and 16.9 million VIC tokens worth $16.7 million were transferred. The remaining $37.6 million was distributed among 16 other lesser-known digital assets.

The fallout from FTX’s bankruptcy continues to unfold as creditors express disapproval of the sale of its Solana holdings. The decision to sell at a significant discount has led to criticism from those impacted by the exchange’s collapse, who feel that their interests are not being adequately represented. The ongoing divestment of digital assets further complicates the situation, raising questions about the handling of assets in the bankruptcy proceedings.

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