The recent decision by the bankrupt crypto exchange FTX to sell its Solana holdings at a significant discount to crypto venture firms has sparked strong disapproval from creditors. Reports have emerged that FTX sold 30 million SOL at a rate of $64 each to VC firms such as Pantera Capital and Galaxy Trading, representing a 62% markdown from the current market price of around $176. Despite positioning the transaction as a means to repay creditors, those impacted by the exchange’s collapse have criticized the move.
Critique from Victims
One of the victims, Sunil Kavuri, expressed his disappointment with the sale, stating that it “destroyed billions of value for FTX creditors.” Kavuri accused the firm’s bankruptcy lawyers, Sullivan & Cromwell, of prioritizing their clients over the creditors by disposing of what he believes to be the creditors’ property. This critique has resonated with others affected by FTX’s downfall, who have raised concerns over the exchange’s liquidation of customers’ digital assets during the ongoing bankruptcy proceedings.
On-chain data has revealed that addresses associated with FTX and Alameda have transferred approximately $15 million worth of crypto to centralized exchanges. Transactions include 1,000 ETH to Coinbase, 1,000 Wrapped Ether (WETH) to Wintermute, and 3,544 Wrapped Binance Coin (WBNB) to Binance. Additionally, the failed exchange moved around $105.9 million worth of 19 different altcoins to intermediary wallets during the week. Approximately $16 million in 13 different assets were then deposited to centralized exchanges. The majority of transactions involved GateChain’s 3.17 million GT tokens, valued at about $31.3 million, along with LEO tokens and VIC tokens.
The decision to sell Solana holdings at a discounted rate has had a significant impact on the value perceived by creditors. The sale, which was expected to fetch FTX about $1.9 billion, has raised concerns among those affected by the exchange’s collapse. While FTX may view this as a step towards repaying creditors, the negative reactions from creditors indicate a lack of confidence in the process. The ongoing divestment of digital assets has also contributed to the unease among stakeholders as FTX continues to navigate through bankruptcy proceedings.
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