FTX and Alameda Research have just executed their largest Solana unstaking event since November 2023, withdrawing over 3 million SOL tokens – valued at approximately $431 million. This significant move is part of their ongoing asset liquidation strategy, which gained momentum after bankruptcy proceedings accelerated in late 2023.
On March 4, blockchain analytics firm Lookonchain flagged the activity, revealing that wallets tied to FTX and Alameda unstaked exactly 3.03 million SOL. Shortly after, a small portion – about 25,000 SOL worth $3.3 million – was deposited into Binance. This aligns with their recent pattern of systematically offloading crypto assets through major exchanges.
Consistent SOL Offloading and Court-Imposed Liquidation Limits
Tracing back to November 2023, the timeline of FTX and Alameda’s SOL unstakings indicates a steady liquidation process. Before this latest event, their largest unstaking occurred in late 2023 when they unlocked 2.1 million SOL, worth around $141 million. Since then, millions more in SOL have been unstaked and systematically transferred to exchanges, suggesting a structured approach toward asset liquidation.
However, despite the sheer scale of these transactions, FTX and Alameda cannot sell their holdings in an unrestricted manner. In September 2023, the Delaware Bankruptcy Court implemented strict selling limitations. Under these conditions, FTX must abide by a structured liquidity schedule, initially permitting only $50 million in digital asset sales per week. This limit increases to $100 million in subsequent weeks, with potential escalations to $200 million per week requiring specific court approval. These measures aim to ensure a controlled liquidation process that minimizes abrupt market disruptions.
Blockchain analytics firm Spot On Chain has provided further insights into these sales, showing that since November 2023, FTX has unstaked a total of 7.83 million SOL. These tokens, valued around $986 million, have predominantly been transferred to Coinbase and Binance at an average price of $125.80 per SOL.
Customer Repayments Amid Solana Liquidation
The continued unstaking and liquidation of SOL tokens coincide with FTX’s ongoing efforts to compensate former customers who suffered financial losses due to the exchange’s collapse. On February 18, FTX began distributing $1.2 billion in digital assets to affected users, marking a significant step in the ongoing bankruptcy resolution.
While this repayment initiative represents a positive shift toward restoring confidence in the industry, it has not been without obstacles. A major challenge has emerged for customers residing in jurisdictions deemed ineligible for repayments. On February 21, FTX creditor and advocate Sunil Kavuri disclosed a list of 163 jurisdictions that do not qualify for distributions. Kavuri noted that multiple claims from these regions have been submitted but currently remain unprocessed due to regulatory complications and compliance challenges. Despite these hurdles, FTX continues to explore mechanisms that may provide an eventual pathway to compensate those in affected regions.
Looking Ahead
FTX and Alameda’s strategic SOL liquidations underline the broader implications of the firms’ downward spiral and ongoing bankruptcy proceedings. Despite the scale of their asset disposals, liquidation constraints imposed by the bankruptcy court ensure a degree of stability in how funds are systematically sold. Meanwhile, the ongoing repayments to affected customers highlight a dual effort: winding down the failed firms while making amends with former users who suffered financial setbacks.
As FTX continues with its asset liquidation process and customer repayments, the crypto community watches closely, weighing the long-term impact of these moves on the broader market and regulatory landscape.
