FTX creditors have recently been given the chance to participate in an auction of the defunct exchange’s remaining Solana token holdings. This marks a shift from previous sales directly to larger venture capital firms such as Galaxy Digital and Pantera Capital. The opportunity was highlighted by Sunil Kavuri, a well-known FTX creditor, who urged retail investors affected by the exchange’s collapse to take part in the auction. Thanks to Figure CEO Mike Cagney, retail FTX creditors can now participate with a minimum investment of $5000, significantly lower than the previous requirement of $5 million to purchase directly from FTX.
In order to facilitate the participation of investors in the auction, Figure Markets will establish a special-purpose vehicle (SPV). This SPV will be open to accredited investors from both the US and abroad, subject to a mandatory know-your-customer (KYC) process. The SPV will operate with input from the community to determine bidding prices and manage subsequent investments. Investors will have the option to contribute in US Dollars, USD Coin stablecoin, Bitcoin, and Ethereum. Despite these developments, the defunct exchange has not released specific details about the auction process at this time.
The Solana (SOL) tokens held by FTX constitute a significant portion of the exchange’s crypto assets, which have been steadily divested at discounted rates. In a recent sale, FTX realized $1.9 billion by selling SOL at $64 per token, well below its current market value. This strategy has received criticism from FTX creditors who argue that the discounted sales are eroding the value of their holdings. Sunil Kavuri expressed his discontent by stating, “It’s not right for FTX to sell our property. Any value Sullivan & Cromwell and co-conspirators have destroyed for FTX creditors, they are being sued for through our class actions.”
The upcoming auction of FTX’s remaining Solana token holdings presents a unique opportunity for creditors to potentially reclaim some value from their investments. Through the establishment of a special-purpose vehicle and the lowering of the minimum investment threshold, retail investors can now participate in a process that was previously out of reach for many. However, the criticisms surrounding the exchange’s discounted sales highlight the concerns of creditors who feel that their holdings are being devalued. It remains to be seen how the auction will unfold and what impact it will have on the overall situation for FTX creditors.