FTX Creditors Urged to Participate in Auction for Remaining Solana Tokens

FTX, a defunct exchange, has announced plans to hold an auction for its remaining Solana token holdings, urging creditors to participate in the process. This decision comes after previous sales were done directly to venture capital firms, sparking controversy among retail investors impacted by the collapse of the exchange.

Sunil Kavuri, a prominent FTX creditor, has highlighted the opportunity for retail investors to participate in the auction through a special structure created by Figure Markets. This structure allows FTX creditors to invest with a minimum of $5000, significantly lower than the $5 million required to purchase tokens directly from FTX.

Figure Markets will establish a special-purpose vehicle (SPV) for accredited US and non-US investors to engage in the auction. Investors will need to pass a KYC process to participate in the SPV, which will operate based on community consensus for bid prices and investment management. Accepted forms of investment include US Dollar, USD Coin stablecoin, Bitcoin, and Ethereum.

Concerns and Criticisms

Despite the auction offering an opportunity for FTX creditors to recover some of their losses, concerns have been raised regarding the previous sales of SOL tokens at discounted rates. The exchange realized $1.9 billion from selling SOL at $64 per token, significantly below its market value, leading to criticism from creditors who believe their values have been diminished.

Kavuri expressed discontent with FTX’s approach, stating that it is unfair for the exchange to sell the property of creditors. He also mentioned ongoing legal actions against Sullivan & Cromwell and other parties involved in the collapse of FTX, suggesting that they are responsible for the losses incurred by creditors.

The upcoming auction for FTX’s remaining Solana tokens presents an opportunity for retail investors to participate in the process and potentially recover some of their losses. However, concerns remain about the previous sales of tokens at discounted rates and the impact on creditors’ values. It is essential for FTX to provide transparent information about the auction process to address these concerns and build trust among creditors.