The crypto world has been abuzz with concerns as the price of Solana (SOL) experienced a drop of more than 6% within the last 24 hours.
These fears are rooted in the possibility that the financially troubled crypto exchange, FTX, may soon liquidate substantial portions of Solana tokens and other related crypto assets.
Data sourced from Solscan reveals that FTX, through its three publicly available cold storage wallets, holds a staggering $1.5 billion in crypto assets within the Solana network.
However, it’s essential to note that Solana tokens account for just $128 million of this substantial figure.
The majority of FTX’s holdings comprise various Solana-based altcoins, including Wrapped Bitcoin (WBTC), Maps token (MAPS), Serum (SRM), and several other tokens playfully referred to as “Sam coins,” in reference to the former FTX CEO, Sam Bankman-Fried.
The prospect of liquidators releasing $128 million worth of SOL and hundreds of millions in other SOL-affiliated tokens into the market has left many investors uneasy.
Some users took to social media platforms, like X (formerly known as Twitter), to voice their concerns, speculating about the impact of such a sell-off on SOL’s price.
One user expressed their apprehension by stating, “FTX about to dump $680 mil worth of SOL 👀,” while another predicted, “SOL is going to dump hard after FTX sells its bag, going to reach 14$ soon.”
However, it’s worth noting that the bankruptcy plan sets specific restrictions on token sales to mitigate market disruption.
As per FTX’s bankruptcy filings, the proposed plan for asset liquidation imposes several conditions on the sale of tokens.
On August 24, FTX suggested appointing Mike Novogratz’s Galaxy Digital Capital Management as the investment manager responsible for overseeing the sales of recovered crypto assets.
Under this plan, the FTX estate is only allowed to sell a maximum of $100 million worth of its tokens per week, although this limit could be raised to $200 million for individual tokens.
These limits have been introduced to minimize the impact of token sales on the broader market while ensuring creditors are compensated.
It’s essential to note that this plan has not yet received court approval, but it is expected to be discussed, along with other FTX token sale matters, in the Delaware Bankruptcy Court on September 13.
