Next FTX Solana Sale: Auction Format Signals Strong Buyer Interest

• The bankruptcy estate of FTX intends to auction a second batch of Solana tokens worth billions, and some of the largest crypto investment firms have expressed interest.
• The estate previously sold SOL tokens worth $1.9 billion through Galaxy Digital; investors purchased the tokens at around $60, but Solana currently trades at over $150.

The bankruptcy estate of collapsed crypto exchange giant FTX is preparing to sell a second batch of Solana tokens for billions of dollars, and investors are lining up as SOL continues to soar.

FTX holds 41 million locked Solana tokens worth $6.341 billion at current prices. A few weeks ago, Bloomberg reported that the exchange’s bankruptcy estate had sold around 30 million tokens at $64 each, raising close to $2 billion.

At the time, SOL was trading at $174, translating to a 63% discount. However, the tokens are locked and were issued to FTX when it invested in Solana Labs. This means that the investors who purchase these tokens won’t be able to sell them for several months.

This is a calculated risk, as the tokens could crash in those months, and their positions could be wiped out. However, the investors are betting that SOL will keep gaining. For instance, those who purchased the tokens at $64 have recorded 140% in profit on paper at today’s prices.

This time, FTX has not set the price of the SOL as it did the last time, as revealed by Mike Cagney, the founder of Figure Markets.

Just got confirmation that the next round of locked #solana coins from the #FTX estate will be an auction, with exact details coming Monday. If you want in, join us. https://t.co/RuA41vgWAx

— Mike Cagney (@mcagney) April 20, 2024

With an auction, FTX could make way more than it would with fixed prices as the investors compete to emerge victorious. The decision to auction the SOL tokens is perhaps influenced by the high interest in the FTX stash. As Crypto News Flash reported, Pantera Capital plans to raise $250 million to participate in the sale.

Figure Markets is among those seeking to compete, with the CEO announcing that the company has launched a special purpose vehicle (SPV) to pool investor money for the purchase. In the US, the SPV will only be available to accredited investors. However, non-US retail investors can participate freely.

FTX Creditors Oppose Solana Sale

FTX creditors who lost billions when Sam Bankman-Fried’s exchange went belly-up have continued to fight Sullivan & Cromwell, the bankruptcy firm handling the exchange. With the latest sale of locked Solana tokens, they say the firm is blatantly abusing its power in collusion with Galaxy Digital, the investment firm led by Mike Novogratz, which is handling the sale.

Sunil Kavuri, an outspoken creditor who has criticized the process for months, stated:

S&C are adamant in selling FTX creditors locked Solana at a heavy discount to their own clients (Galaxy), despite our objections.

However, he has backed Figure Markets’ effort to pool resources from retail trades to purchase the tokens. He revealed that through the SPV, investors can participate with a minimum of $5,000; previously, investors could invest a minimum of $5 million to purchase the SOL.

Solana trades at $152.09 at press time, gaining 1.57% in the past day.