The price of Solana dropped by over 6% in the last 24 hours due to growing concerns about a potential massive sell-off by the bankrupt exchange FTX. However, is there a real threat that FTX will sell all its assets at once?
The price of Solana experienced a significant drop, and the market fears that FTX, a currently non-operational cryptocurrency exchange, might soon sell substantial amounts of this token and other crypto assets linked to Solana.
Data analysis from Solscan, including three publicly available FTX cold storage wallets, indicates that FTX’s assets in the Solana network amount to a total of $1.5 billion. Of this staggering amount, Solana tokens account for just $128 million.
The remainder consists of various Solana-based altcoins like Wrapped Bitcoin (wBTC), Maps token (MAPS), and Serum (SRM). Some of them are jokingly referred to as “Sam’s coins” – a nod to former FTX CEO, Sam Bankman-Fried.
Nevertheless, the prospect of introducing tokens worth $128 million in SOL form and hundreds of millions in the form of other SOL-related tokens does not inspire confidence in investors.
Many users expressed their concerns on platform X (formerly known as Twitter), predicting an imminent massive sell-off. Comments like “FTX will soon sell assets worth $680 million in the form of SOL” were not scarce.
However, others urged calm, pointing to the fact that the bankruptcy plan does limit the number of tokens that can be sold at once. According to FTX’s bankruptcy documents, the asset liquidation plan for FTX introduces a series of conditions concerning the sale of tokens.
This plan anticipates that FTX will be able to sell tokens worth up to $100 million weekly, although this limit might be raised to $200 million for specific tokens.
Such restrictions aim to minimize the impact of token sales on the broader market while allowing FTX to repay its creditors.
Notably, this plan has not yet been approved by the court. However, it’s expected that the plan and other matters related to FTX’s token sales will be presented before the Bankruptcy Court in Delaware on September 13.
In a hearing held on April 12, FTX revealed that it had recovered assets worth around $7.3 billion, of which $4.8 billion were assets recovered by November 2022.
