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- FTX estate is auctioning off an estimated amount of Solana (SOL) tokens this week.
- The SOL tokens will be sold through a ‘blind auction method,’ where the bidders have a chance of becoming proud holders of the digital assets.
According to insider sources, the estate of FTX, the defunct cryptocurrency exchange, is auctioning off an estimated amount of Solana (SOL) tokens this week. The bidding, which will employ a “blind auction” method, concludes on Wednesday, and the announcement will be made on Thursday.
The SOL tokens will be sold through a ‘blind auction method,’ where the bidders have a chance of becoming proud holders of the digital assets. Thus, this auction method preserves the bidders’ anonymity, which in turn promotes fairness and transparency in the process. The auction represents a shift from the past fixed-price sales methods, which rely on the perhaps lower market prices. The sale continued after the sharp SOL price drops with huge markdowns on SOL tokens, which forced the company to scan liquidation alternatives.
Auction-based Liquidation Strategy
The FTX bankruptcy estate, headed by Figure Markets CEO Mike Cagney, has decided to use an auction mechanism to dispose of its locked SOL tokens. Such an action targets higher market prices than what direct sales could previously bring and often leads to some considerable rebate.
Through the use of an SPV, Figure Markets allows access to non-U.S and U.S.-accredited investors who will ultimately help in the returns maximization ventures and will advance community-led decision-making on bid prices. Interested parties can raise funds using cryptocurrency or fiat currencies with bid prices determined by a one-dollar-one vote system within the SPV framework.
Just got confirmation that the next round of locked #solana coins from the #FTX estate will be an auction, with exact details coming Monday. If you want in, join us. https://t.co/RuA41vgWAx
— Mike Cagney (@mcagney) April 20, 2024
The auction-based sales have achieved positive responses from certain FTX creditors, especially those who had felt disadvantaged by the former fixed-price sales. More importantly, creditors’ representative Suni Kavuri has shown interest as the move increases the possibility of bigger numbers of small investors participating.
Having a minimum required investment threshold of $5,000, which is lower than the previously set $5 million for direct purchases, the auction is designed to ensure democratic participation and enhance inclusiveness among prospective buyers.
S&C are adamant in selling FTX creditors locked Solana at a heavy discount to their own clients (Galaxy), despite our objections
I have spoken to @mcagney. He created a structure to allow retail FTX creditors to participate with a min. investment of $5000 vs. the $5m required… https://t.co/yut9Xub4O5
— Sunil (FTX Creditor Champion) (@sunil_trades) April 21, 2024
Legal Challenges and Criticisms
In contrast, FTX is still pursuing a complicated process of bankruptcy entry, and depreciations remain concerning the administration of the bankruptcy estate. Suni mentioned the valuation techniques used by Sullivan & Cromwell, an attorney, to manage the proceedings effectively.
According to him, these practices are the reason that assets were undervalued, which eventually turned into an obstacle to creditors’ attempts to recover their money. Moreover, these grievances are the bits of a legal action that has been in motion on behalf of creditors seeking damages from any party that influenced the management of the estate.
FTX’s sale of Solana tokens at discounted prices was highly criticized by the creditors because this action is alleged to be the cause of the decrease in the market value of creditors’ investments. Additionally, the platform in question revealed $1.9 billion from the buying back of SOL tokens at a $64 price, which is a huge difference from its current price range.
