Solana is gearing up to unveil a significant total of 11.2 million SOL tokens today, with an estimated value of $1.57 billion. This release forms a crucial part of the ongoing bankruptcy process related to the defunct FTX exchange.
This unveiling arrives amidst a surge in legal costs, which are solidifying FTX's bankruptcy as one of the costliest Chapter 11 cases in American history.
Massive Unveiling of Solana Tokens in FTX Bankruptcy Estate
Data retrieved from on-chain sources indicates that the unlocked SOL accounts for roughly 2.2% of Solana's current circulating supply, which presently amounts to 488 million tokens.
Furthermore, the FTX estate has scheduled two more SOL unlocks in the upcoming months. On April 1, 12,700 SOL will be distributed, followed by an additional release of 73,700 SOL on May 1.
These tokens were part of FTX's reserves, previously sold at discounted rates to various investors in past auctions.
Renowned creditor advocate Sunil Kavuri disclosed that FTX had liquidated a total of 41 million locked SOL through three auctions. The buyers consisted of major crypto investment firms, such as Galaxy Digital and Pantera Capital.
Galaxy Digital notably secured 25.5 million locked SOL at a price of $64 per token, significantly lower than the current market rate of $144 per token. Other firms like Pantera acquired their SOL at around $95 per token, while Figure and its associates purchased SOL at $102 each.
Arthur Cheong, the founder of DeFiance Capital, participated in Galaxy Capital's OTC sale, acquiring an undisclosed number of SOL at $64 per token. Cheong expressed his intentions to hold onto the tokens, anticipating a notable price increase in the near future.
As the SOL tokens are unleashed, concerns have arisen regarding the potential impact on selling pressure. The influx of new tokens into the market could raise supply levels and potentially drive prices down.
Following a recent downtrend, where Solana's price had dropped to about $136 – marking a four-month low amidst the broader cryptocurrency market slump, the digital asset has since bounced back to approximately $140 at the time of writing.
This development coincides with a critical stage in FTX's bankruptcy proceedings, as initial distributions to creditors are being carried out. However, the substantial legal costs linked to the case are nearing an impressive $1 billion, positioning it as one of the most expensive Chapter 11 filings in U.S. history.