FTX Estate Sells Last Solana Tokens

The FTX estate, handling the collapsed exchange's bankruptcy, has auctioned off the last of its discounted Solana (SOL) tokens, valued at $2.6 billion, to Pantera Capital and Figure Markets to reimburse former creditors and clients.

The tokens were sold at $102 per token, well below the current market price of $168. Figure Markets acquired 800,000 SOL tokens, while Pantera Capital obtained the remaining lot.

A four-year vesting schedule for the tokens will be implemented as part of the agreement with the purchasers. This structured release aims to mitigate potential market impacts from the significant transaction.

Controversy Surrounding the Sale

The FTX bankruptcy estate has recovered $7.3 billion in assets so far. However, the recovery efforts have been subject to controversy.

Sunil Kavuri, a creditor leading the FTX creditor community, criticized the estate's decision to sell assets at such deep discounts. He argued that the digital assets should have been returned directly to the creditors and clients rather than sold cheaply.

"Sullivan & Cromwell has trampled over our property rights. They have liquidated billions of dollars of crypto assets. There's a token S&C sold at 11 cents; it's now trading at two dollars. FTX had $10 billion in Solana tokens—they sold it at a 70% discount," Kavuri stated.

Kavuri and others affected by the FTX collapse have criticized how bankruptcy lawyers Sullivan & Cromwell have handled reimbursements.

The court ordered an independent investigation into Sullivan & Cromwell's role in the bankruptcy proceedings, ultimately clearing them of collusion with FTX. Despite this, criticisms persist regarding the handling of asset sales.

Market Reaction and Whistleblower Claims

Following the announcement of the bankruptcy auctions, SOL's price dropped by 4%, but the alternative Layer 1 network continues to show strong price performance.

According to an independent examiner's report by Robert Cleary, FTX Group allegedly paid over $25 million in bribes to seven whistleblowers before the crypto exchange's collapse in November 2022.

The report revealed that FTX settled claims with whistleblowers who raised concerns about various improprieties, including systemic issues and misleading regulators.

These settlements, handled primarily by attorney Daniel Friedberg, ranged from $1.8 million to $16 million.

Legal Ramifications and Regulatory Findings

US prosecutors want Ryan Salame, who pleaded guilty to campaign finance violations and operating an illegal money-transmitting business while CEO of FTX's Bahamian subsidiary, to serve up to seven years in prison.

Salame's charges include orchestrating a scheme allowing customers to use U.S.-based bank accounts without federal compliance and participating in illegal political donations amounting to over $100 million.

Prosecutors argue that his offenses are significant, involving more than $1 billion in unlicensed transactions, and call for a substantial sentence to ensure appropriate punishment and deter future crimes.

Charitable Actions and Repayments

The UK government's Charity Commission investigation also recently found that Effective Ventures Foundation, an FTX-funded charity, acted diligently and quickly to protect its funds after FTX's collapse. Following FTX's collapse, Effective Ventures disclosed its connections to the exchange, prompting a regulatory probe.

The charity repaid $4.3 million to the FTX estate, matching the total amount it received from FTX and its foundation in 2022. Effective Ventures' interim CEO, Zachary Robinson, stated that EV UK and EV US collectively repaid $26.8 million to the FTX estate, covering all funds received.