FTX estate unlocks $45M worth of Solana from staking

The bankruptcy estate of FTX and its sister trading firm Alameda Research has redeemed another batch of Solana from staking positions to continue repaying creditors, according to the latest on-chain data.

FTX and Alameda have reportedly redeemed about 192,000 SOL tokens, valued at roughly $44.9 million. The tokens could be distributed to several wallets before being transferred to exchanges in the coming weeks.

“They redeemed 192,000 $SOL from staking, which will likely be distributed and transferred to multiple addresses later today, as usual. Most of these addresses receiving SOL will subsequently transfer the SOL to Coinbase or Binance,” EmberCN wrote.

The redemption follows a withdrawal of just under 191 SOL from staking pools a month ago. Per blockchain records on Solscan, the estate still has 4.18 million SOL staked.

Billions in Solana already liquidated

According to data from Solana’s transactions explorer, the FTX-Alameda staking address has redeemed and transferred a total of 8.98 million SOL since November 2023. The total amount obtained from the transactions was worth $1.2 billion, at an average sale price of $134 per SOL.

The estate still holds approximately 4.18 million SOL, currently valued at around $977 million, staked under the estate’s control. Most of the tokens are subject to a four-year vesting schedule. 

Due to the restrictions, the estate has been selling them gradually through private auctions at discounts to the market price. Buyers in those auctions have included crypto firms such as Galaxy Digital and Pantera Capital.

The staked coin redemptions have not negatively affected Solana’s market price. According to CoinGecko, the token went up 6.2% in the past 24 hours to reach $237.71 as of 8:50 AM BST Thursday. Over the past week, Solana has gained more than 14%, recording its lows at $199 on September 6.

The beleaguered exchange will make its next round of creditor repayments on September 30, though the estate has not disclosed the size of the payout. BitGo, Kraken, and Payoneer are the designated distribution partners to process the repayments.

The estate began repaying creditors earlier this year after securing court approval for its redistribution plan. So far, approximately $6.2 billion has been returned to customers across two prior distributions. In February, creditors received $1.2 billion, followed by a $5 billion payout in May.

Top exchange turned bankrupt still in US court’s watch

FTX was the world’s third-largest cryptocurrency exchange by trading volume before its collapse in November 2022. The firm’s downfall began after scores of customers and investors, including Binance, rushed to withdraw funds and dented holes in its balance sheet. The company became insolvent and filed for bankruptcy protection in the United States.

Founder and chief executive Sam Bankman-Fried was later convicted of defrauding customers and investors of more than $11 billion in 2023. The court sentenced him to 25 years in prison, and he’s currently serving his sentence at a transfer facility in Oklahoma. 

As reported by Cryptopolitan on Tuesday, joint liquidators for failed hedge fund Three Arrows Capital (3AC), Russell Crumpler and Christopher Farmer, filed a legal notice with the US Bankruptcy Court for the District of Delaware to depose Bankman-Fried under Rule 45 of the Federal Rules of Civil Procedure.

3AC co-founder Zhu Su is accusing him of improperly liquidating $1.5 billion of the fund’s positions without proper justification. Associate Ryne Salame, a former FTX executive, has also been accused of using insider information to front-run trades against customer positions. Those trades allegedly allowed him to cash out more than $1 billion before the exchange collapsed.

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