Defunct crypto exchange FTX recently sold two-thirds of its Solana holdings for a massive discount, Bloomberg reported at the close of the week.
FTX recently received a court order to sell its massive SOL holdings to repay its creditors. As one of the largest holders of the cryptocurrency, the news of the court order sparked a wave of concerns from SOL investors, as a total selloff by FTX could tank the price of the cryptocurrency in just a few hours. Interestingly, the bankrupt crypto exchange has now gone ahead to sell a majority of its holdings below market value.
FTX: Details Of The Selloff
As noted by Bloomberg, the bankrupt crypto exchange FTX sold around 30 million tokens to key investors, enabling it to round up $1.9 billion in funds. These SOL tokens were sold to prominent industry figures including Galaxy Trading which bought $620 million worth of SOL and Pantera Capital which bought $250 million worth of SOL.
Considering the number of tokens sold and the amount raised, It is estimated that they were sold at $64 for each SOL. At the time of the transaction, SOL was trading at around $172, meaning they were sold at a 63% discount to the market price and were actually worth $5.16 billion.
Total crypto market cap at $2.5 trillion on the daily chart: TradingView.com
To avoid a price catastrophe, the SOL tokens which are still under lock, are bound by a four-year vesting schedule with gradual monthly unlocking until January 2028. At the time of writing, the defunct exchange still has 21 million SOL tokens locked up that are worth around $3.75 billion at the current market price.
Current State Of Solana
The eventual collapse of FTX in 2022 led to a cascade of price slumps for Solana. This is because the former CEO of the exchange, Sam Bankman-Fried (SBF), was an avid supporter of SOL and had spent so much of the company’s funds to stock up on the cryptocurrency. As Bitcoinist reported, SBF has now been handed a 25-year prison sentence for his pivotal role in the collapse of the exchange.
Solana, on the other hand, went through a price surge late last year which saw it eventually stepping out of the shadow left behind by FTX. Aside from its price growth, Solana’s ecosystem has expanded with an increase in meme coin success and is now starting to rival Ethereum as the king of altcoins.
Solana has also seen robust growth in the Decentralized Exchange (DEX) and Decentralized Finance (DeFi) sectors. Particularly, the blockchain saw its DEX trading volume skyrocket by 332% and its market cap increase by 97% last quarter.
At the time of writing, Solana is trading at $179.12, up by 1.25% in the past 24 hours.
Featured image from Pexels, chart from TradingView