The ongoing saga of FTX’s bankruptcy took a significant turn with the sale of a massive chunk of its Solana (SOL) holdings. This fire sale, raising $1.9 billion for the FTX estate, involved 25-30 million locked SOL tokens at a deeply discounted price of $64 each.
Bargain Basement for Big Players
This fire sale attracted industry heavyweights like Galaxy Digital’s Galaxy Trading and Pantera Capital. The discounted price, compared to SOL’s market value of around $172 at the time, presented a potentially lucrative opportunity for these firms. However, the deal comes with a catch: a four-year lock-up period for the purchased SOL.
Galaxy Trading, led by crypto bull Mike Novogratz, spearheaded fundraising efforts for this deal. Their $620 million dedicated fund, charging a 1% management fee, signifies a long-term strategy for managing and potentially profiting from the acquired SOL. Pantera Capital also expressed significant interest, aiming to invest up to $250 million.
These actions by major players highlight a belief in SOL’s potential despite its volatility. The broader industry interest in FTX’s liquidated assets further emphasizes this point.
Scrutiny and Controversy
FTX’s handling of its asset sale has faced criticism. Initially halting the SOL sale due to high buyer interest raised questions about transparency. The decision to sell at a discount may prioritize quick funds for the estate but could disadvantage creditors. Additionally, Sam Bankman-Fried‘s past association with SOL adds a layer of complexity and potential conflict of interest.
Also Read: Scramble for Locked SOL! FTX Estate’s $7.5 Billion Auction Heats Up as Investors Rush In
Mixed Reactions from Creditors
The discounted sale price has drawn mixed reactions from creditors. Some express dissatisfaction, claiming they were shortchanged by basing claims on the lower SOL price at the time of FTX’s bankruptcy filing. This issue is further complicated by SOL’s price increase in subsequent months.
The FTX saga continues to unfold, with the recent SOL sale marking a significant step. While it brings much-needed funds to the estate, questions remain about the fairness of the sale and its impact on creditors. Only time will tell if the calculated risks taken by industry giants like Galaxy Trading and Pantera Capital pay off in the long run.
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