FTX creditors have expressed strong disapproval towards the decision made by the bankrupt crypto exchange to sell its Solana holdings at a significant discount to crypto venture firms. Selling 30 million SOL at a rate of $64 each to VC firms like Pantera Capital and Galaxy Trading, which is a 62% markdown from the current market price of $176, has stirred up controversy. Despite the move being positioned as a step towards repaying creditors, those affected by the exchange’s collapse view it negatively. One victim, Sunil Kavuri, criticized the sale, stating that it “destroyed billions of value for FTX creditors,” further accusing the firm’s bankruptcy lawyers of prioritizing their clients over the creditors by disposing of what he considers to be creditors’ property.
Criticism towards FTX extends beyond the controversial Solana sale to the exchange’s recurrent liquidation of customers’ digital assets within the ongoing bankruptcy proceedings. On-chain data reveals that addresses linked to FTX and Alameda have transferred approximately $15 million worth of crypto to centralized exchanges. Transactions include 1,000 ETH to Coinbase, 1,000 Wrapped Ether (WETH) to Wintermute, and 3,544 Wrapped Binance Coin (WBNB) to Binance. Notably, during the week, addresses associated with the failed exchange moved around $105.9 million worth of 19 different altcoins to two intermediary wallets, with approximately $16 million deposited to centralized exchanges. GateChain’s 3.17 million GT tokens, valued at about $31.3 million, dominated the transactions, along with 3.37 million LEO tokens worth $20.4 million and 16.9 million VIC tokens worth $16.7 million being transferred. The remaining $37.6 million was distributed among 16 other lesser-known digital assets.
The controversial Solana sale and the recurrent liquidation of digital assets by FTX raise concerns about the impact on creditor trust and the exchange’s reputation. FTX creditors, already disenfranchised by the exchange’s collapse, feel further betrayed by what they perceive as actions that undermine their interests and jeopardize potential financial recovery. Sunil Kavuri’s critique reflects the sentiments of many creditors who have suffered losses due to FTX’s downfall and subsequent handling of assets. The distrust and negative perception resulting from these actions may have long-term consequences for FTX’s ability to rebuild trust and credibility within the crypto community.
FTX’s decision to sell its Solana holdings at a significant discount and the recurrent liquidation of digital assets have sparked controversy and disapproval among creditors. The impact on creditor trust and the exchange’s reputation presents significant challenges in terms of rebuilding trust and credibility. Moving forward, FTX will need to address these concerns and take proactive steps to restore confidence among those affected by its actions.