The FTX estate, which manages the bankruptcy of the defunct exchange, recently concluded the sale of its remaining heavily discounted Solana (SOL) tokens. The tokens, valued at $2.6 billion, were sold to Pantera Capital and Figure Markets at $102 per token, below the market price of $168. This sale was part of efforts to reimburse creditors and former clients. The purchasers have agreed to a four-year vesting schedule for the tokens to minimize market impacts from the transaction. So far, the FTX bankruptcy estate has recovered $7.3 billion in assets, though the recovery process has faced criticism for selling assets at deep discounts.
Following the announcement of the bankruptcy auctions, the price of SOL experienced a 4% drop. However, the alternative layer-1 network has shown strong price performance, with SOL currently on an uptrend since November 2023, reaching a high of $210. The estate has faced backlash from affected parties, including creditor Sunil Kavuri, who criticized the decision to sell assets at such low prices. Kavuri argued that the assets should have been returned to creditors and clients rather than sold cheaply. The estate’s bankruptcy lawyers, Sullivan & Cromwell, faced scrutiny, with an independent investigation ultimately clearing them of collusion with FTX.
An independent examiner’s report by Robert Cleary revealed that FTX Group allegedly paid over $25 million in hush money to seven whistleblowers before the exchange’s collapse in November 2022. Whistleblowers raised concerns about systemic issues and misleading regulators, with settlements ranging from $1.8 million to $16 million. Former FTX executive Ryan Salame is facing a 5-to-7-year sentence for campaign finance violations and operating an illegal money-transmitting business during his tenure as CEO of FTX’s Bahamian subsidiary. US prosecutors claim his offenses involved more than $1 billion in unlicensed transactions, warranting a significant sentence.
The UK government’s Charity Commission investigation found that the Effective Ventures Foundation, an FTX-funded charity, acted swiftly to protect its funds after FTX’s collapse. Effective Ventures disclosed its connections to the exchange post-collapse, prompting a regulatory probe. The charity repaid $4.3 million to the FTX estate, matching the total amount it received from FTX in 2022. Effective Ventures’ interim CEO, Zachary Robinson, stated that the foundation repaid $26.8 million to the estate, covering all funds received. These developments shed light on the various legal and financial issues surrounding FTX’s bankruptcy and the subsequent efforts to reimburse stakeholders.
