The price of Solana (SOL) has fallen more than 6% in the last 24 hours, amid fears that the bankrupt crypto exchange FTX may soon liquidate significant portions of the token and other assets of Solana’s crypto partner.
According to a combination of data from Solscan, which adds the value of three publicly available FTX cold storage wallets, the FTX estate holds a combined $1.5 billion in crypto assets in the Solana network.
Of that hefty number, Solana tokens are worth only $128 million.
The remaining amount is made up of many Solana-based altcoins such as Wrapped Bitcoin (WBTC), Maps token (MAPS), Serum (SRM) and many other tokens commonly referred to as “Sam coins” – a mockery of former FTX CEO Sam Bankman-Fried.
However, the idea that liquidators could soon release $128 million worth of SOL and hundreds of millions worth of other SOL-associated tokens into the market did not inspire much confidence in the market.
Many users took to X (formerly known as Twitter) to voice their concerns about the upcoming sale. “FTX is about to drop $680 mil worth of SOL 👀” WRITES a user. “SOL will lose a lot after FTX sells its bag, reaching 14$ soon,” SAYS another.
Others instead urge calm, because the bankruptcy plan actually limits how much can be sold immediately.
According to FTX bankruptcy filings, the proposed plan for the liquidation of FTX’s assets imposes a series of conditions on the sale of tokens.
On August 24, FTX proposed to appoint Mike Novogratz’s Galaxy Digital Capital Management as an investment manager to oversee the sale of the acquired crypto holdings.
In this plan, FTX land will only be allowed to sell a maximum of $100 million worth of its tokens per week, however, that limit can be raised to $200 million in an individual standard token.
These limits were introduced in a bid to minimize the impact of the token sale on the wider market while still allowing FTX to make its creditors whole.
FTX collapsed and as a result the biggest black swan Solana endured put SOL at $8
And we’re worried about ~$600M in sales over the next 5 years?
Other Major L1s have higher inflation than this and no one cares.
– Gumshoe (@0xGumshoe) September 10, 2023
Notably, the plan has not yet been signed by the courts, however, the plan and many other matters related to the FTX token sale are expected to come before the Delaware Bankruptcy Court on Sept.
Related: FTX wallet moves $10M in crypto, sparking fears of token dumps to come
In an April 12 hearing, FTX disclosed that it had recovered roughly $7.3 billion in liquid assets, with $4.8 billion of that amount comprised of assets acquired in November 2022.
In total however, according to documents raised at the hearing, FTX has a total of $4.3 billion in crypto assets available for stakeholder recovery at market prices as of April 12.
At press time, Solana was changing hands at $18.38 apiece, down nearly 11% on the week.
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