0
0
Efficient Recovery Strategy Employed by FTX Bankruptcy Estate
The bankruptcy estate of the former cryptocurrency exchange FTX has devised a novel approach to recuperating its remaining locked Solana (SOL) tokens by opting to conduct an auction. The intent is to potentially realize a higher market price compared to direct sales, as disclosed by Mike Cagney, the CEO of crypto platform Figure Markets, through a Twitter announcement.
This departure from the prior method of liquidating tokens at fixed market rates comes in the wake of recent sales indicating significant markdowns on the initial value. Notably, a recent sale transaction of 26,964 SOL tokens at $64 each represents a noteworthy 67% reduction from prevailing market rates.
Participation in Auctions and Establishment of Special Purpose Vehicle
Figure Markets has emerged as an active participant in these auctions and is in the process of setting up a Special Purpose Vehicle (SPV). This vehicle is intended to facilitate involvement from both non-U.S. investors as well as accredited ones from the United States. Through the SPV, bid pricing decisions will be community-driven, with a voting mechanism where each dollar invested equates to a single vote. Investors can leverage U.S. dollars, USDC stablecoin, Bitcoin, and Ether for their contributions.
FTX had, in a previous move, enlisted Galaxy Digital CEO Mike Novogratz to manage the liquidation of $3.4 billion in Bitcoin, Ethereum, Solana, and other digital assets. Subsequently, Pantera, an asset manager with $5.2 billion under management, initiated efforts to raise funds for a Pantera Solana Fund directed at acquiring up to $250 million worth of SOL from the FTX estate. Additionally, Neptune Digital Assets Corp., based in Vancouver, recently announced its purchase of 26,964 SOL tokens for $1.7 million.
Positive Reception and Critique of Transition
The transition to an auction-based model has garnered positive feedback from certain FTX creditors, particularly those who felt disadvantaged by the prior fixed-price sales strategy. Notably, activist Suni Kavuri, a vocal adversary critical of how Sullivan & Cromwell—a legal entity overseeing FTX’s bankruptcy process—handled asset valuation, commended the newer approach for leveling the playing field, making investment opportunities more accessible to smaller participants. The minimum investment threshold has notably decreased from $5 million to $5,000.
Kavuri’s stance and criticisms form part of a broader class-action lawsuit filed against parties involved in managing FTX’s bankruptcy estate. The lawsuit seeks remediation for what is perceived as a degradation in the value of assets belonging to the creditors.
Image/Photo credit: source url
