FTX estate stakes 5.5 million Solana coins

In a significant move demonstrating confidence in the Solana cryptocurrency, FTX, the prominent crypto exchange, staked a substantial 5.5 million SOL (Solana) coins on October 13. According to on-chain data, an FTX-identified wallet initiated the transaction, sending these coins to Figment, a staking validator firm catering to institutional investors.

The transaction did not go unnoticed, as the blockchain tracker Whale Alert detected it. Subsequently, pseudonymous on-chain researcher Ashpool identified the wallet as an FTX estate address. These 5.5 million SOL tokens represent a substantial value, approximately $122 million. Nevertheless, it’s crucial to note that this is only a fraction of FTX’s total SOL holdings.

Staking in the cryptocurrency realm involves locking up a specific amount of tokens for a predetermined period. In return for securing the network with their staked tokens, holders of these stakes receive SOL coins as rewards.

FTX’s interest in Solana is no secret. The exchange was an early investor in Solana and continues to receive a substantial volume of SOL tokens through the established vesting schedule. Importantly, the FTX estate, overseen by a bankruptcy trustee, holds the option to liquidate these assets at any time. Its primary purpose revolves around recovering assets for the exchange’s creditors.

In a related development, a U.S. court approved the sale of $1.3 billion worth of SOL tokens from FTX in September. This decision raised concerns among token holders regarding a potential decline in SOL’s market value. To mitigate the impact on the crypto market, the bankruptcy court mandated that the sale be conducted through an investment advisor in weekly batches. This approach led to SOL’s price hitting a two-month low of $17.34 on September 11.

FTX’s extensive holdings include $3.4 billion in Digital Assets A, which is one of the top ten assets held by the company. This impressive portfolio encompasses not only Solana but also major cryptocurrencies like Bitcoin, Ether, and Aptos, among others. Court documents from September indicated that over $7 billion had been recovered since the exchange filed for bankruptcy protection in November 2022.

An additional layer of complexity surrounds FTX’s co-founder, Sam Bankman-Fried. Currently, he is undergoing a trial at a Manhattan district court, where he faces accusations of fraud and conspiracy to commit fraud. If found guilty, he could potentially face a staggering prison sentence of up to 115 years. These legal proceedings undoubtedly add a layer of uncertainty to FTX’s activities, including its holdings and investments in cryptocurrencies like Solana.