Solana is Set to Release 11.2 Million SOL Tokens Today

This unlock is part of the ongoing bankruptcy process for the defunct FTX exchange.

Solana (SOL) tokens, part of the bankrupt FTX estate, are set to unlock today, releasing 11.2 million SOL valued at approximately $1.57 billion.

The unlock is a significant development in the ongoing bankruptcy case, which has also seen massive legal expenses making it one of the most costly Chapter 11 filings in the US.

FTX’s bankruptcy proceedings have entered a critical phase with initial creditor distributions taking place. However, a report from The Block on Monday noted that legal expenses tied to the case are nearing $1 billion.

This positions the FTX case among the most costly Chapter 11 filings in recent US history.

For instance, the 2008 bankruptcy of Lehman Brothers, a major investment bank, is estimated to have cost around $8 billion in today’s dollars.

Earlier this month, an attorney representing FTX creditors highlighted the substantial sums being spent on the bankruptcy case.

“We’re talking about an astronomical number—nearly $1 billion in fees to lawyers and other advisors. In comparison, the creditors are set to receive only a fraction of the claims at 38 percent, totaling approximately $3.1 billion.”

The staggering legal expenses are a consequence of the complex and multi-faceted nature of the FTX bankruptcy case. The exchange operated in numerous jurisdictions and had dealings with various institutional investors.

After FTX went bankrupt last year, several crypto firms, including Galaxy Digital and Pantera Capital, participated in auctions for locked Solana tokens.

According to Sunil Kavuri, a leading creditor advocate, around 41 million locked SOL were liquidated by FTX across three auctions.

Galaxy Digital, the largest buyer, secured 25.5 million locked SOL at $64 per token, which is a significant discount compared to the current market price of $144.

Pantera and other firms purchased SOL at approximately $95 per token, while Figure and its partners acquired SOL at $102.

Arthur Cheong, the founder of DeFiance Capital, confirmed his participation in Galaxy Capital’s over-the-counter (OTC) sale. He stated that he purchased an undisclosed amount of SOL at $64 per token and has no plans to sell.

“Participated in the SOL OTC deal at $64 via Galaxy and received the bullet unlock today. Not selling a single one of them. I think it will be substantially higher in 3 months,” Cheong said.

The release of SOL tokens raises concerns about potential selling pressure that could impact the cryptocurrency’s price.

Over the past week, Solana’s price dipped to a four-month low of around $136 amid a broader crypto market decline. However, the digital asset’s value has since rebounded to approximately $140.

Solana’s price performance in 2024 has been mixed, with the cryptocurrency’s price decreasing by 16 percent since the beginning of the year.