FTX's First Funding Round Unwinding: Unlocking 11.2 Million SOL Triggers Selling Pressure Anxiety
Original Title: "FTX First Round of Payouts Commences, Unlocking of 11.2 Million SOL Tokens Causes Market Sell Pressure Anxiety, an Overblown 'Crying Wolf'?"
Original Author: Frank, PANews
On February 18, 2025, the FTX first-round creditors' payouts officially started, marking a crucial phase in this two-year-long bankruptcy liquidation. However, market attention is now focused on another potential risk: on March 1, 11.2 million SOL tokens from the FTX bankruptcy auction are set to unlock, valued at up to $1.9 billion. Despite the payouts appearing "mild" with fiat settlement, the expected large circulation of SOL has raised market concerns. The aftershocks of FTX's asset sell-off are poised to once again impact the crypto ecosystem. Is the spreading panic an overreaction, or has the risk not been fully priced in yet?
Over 50 Billion Still Outstanding in First Round
Public information indicates that the creditors in this round receiving payouts are initial beneficiaries, referring to small creditors with claims of $50,000 or less. According to FTX's restructuring plan, they will receive full repayment and enjoy a 9% annual interest. These users may ultimately receive a 119% fiat-denominated repayment.
According to FTX creditor Sunil, the current payout in this round has already disbursed around $800 million, covering 162,000 accounts, which represent 35% of the estimated 460,000 eligible claim accounts. Moreover, payouts exceeding $50,000 will have to wait until after May 30.
Previous reports indicated that the overall payout amount for the first phase ranged from $65 to $70 billion. It is expected that this round of payouts will continue until March 4. However, FTX has not yet disclosed the actual payout amount from the first round.
From a payout perspective alone, since FTX has opted for fiat payouts, the commencement of payouts may not cause significant turbulence in the crypto market. It might even bring in some new entry funds into the market.
Nearly $2 Billion Worth of OTC SOL Token Unlocking
The market's anxiety about FTX primarily stems from the auction of crypto assets like Solana. Documents as of 2023 showed that FTX's asset total was only $47.7 billion, creating a $68 billion gap compared to the estimated $115 billion payout at the time. As the crypto market ushered in a bull run in 2024, the crypto assets held by FTX saw a significant surge.
FTX's largest blood transfusion recipient is Solana, with the SOL token seeing a surge of over 28 times its value since December 2022. As one of Solana's key investors, FTX holds a significant amount of locked SOL tokens. According to monitoring data from @ai_9684xtpa, FTX has already conducted three auctions, selling a total of 41 million SOL as of February 17. Among these, 11.2 million SOL will unlock on March 1.
Reportedly, the 41 million tokens were not sold directly on the secondary market but were sold to Galaxy (purchased 25.52 million tokens at $64), Pantera and other buyers (purchased 13.67 million tokens at $95), Figure and other buyers (purchased 1.8 million tokens at $102). Overall, these tokens brought FTX $2.932 billion in revenue, becoming its largest category of liquidation income in the crypto asset class.
Regarding the unlocked SOL tokens, this transaction likely took place through previous auctions, and the unlocking now signifies the actual delivery. Regardless of the ultimate beneficiary, these tokens will enter circulation, with the known buyers' costs significantly below market price. Therefore, there is indeed a risk of profit-taking selloff, but the upcoming unlocked SOL tokens represent only 2.3% of the current circulating supply.
Sui Has Repurchased Equity, Disposal Methods for APT, AVAX, and Other Assets Unknown
In March 2024, FTX announced the sale of its investment in Mysten Labs to Sui Network for $95 million. Mysten Labs is the development company behind the Sui network. By the end of 2024, the value of these sold equity and tokens reached a peak of $4.6 billion. For the market, if FTX retains these tokens, the SUI market could face increased pressure.
Aside from Solana and Sui, Aptos was also one of FTX's initial key investments in public blockchains. According to media reports, in 2022, FTX Ventures and Jump Crypto led a $150 million investment in Aptos. However, the final disposition of this equity has not been disclosed by Aptos to date. According to data provided by FTX in March 2023, they held 5 million APT tokens at that time. However, in ARKM's FTX on-chain address, there is currently no information available about APT tokens. Based on the price as of February 19, the value of this APT portion is approximately $31.65 million.
As of February 19, in the FTX on-chain address, the largest holding token is FTT, with a total of 257 million tokens, worth about 505 million US dollars. The total market value of FTT is only 657 million US dollars. If the holding is sold off, a price impact could pose the greatest risk. FTX once asked users to fill in the purchase price of FTT, but in the fiat valuation compensation, FTT is temporarily counted as 0. It is still uncertain how FTT holders will be compensated.
In the document disclosed in 2023, it is shown that FTX also holds 1.42 million AVAX tokens (worth 33.76 million US dollars), 36,000 BTC (worth 346 million US dollars), 154,000 ETH (worth 410 million US dollars), 29.7 million XRP (worth 76.32 million US dollars), and other major crypto assets. However, as of February 19, these assets are no longer visible in FTX's public wallet address as they have been sold off during the liquidation period. As of February 19, the on-chain address holding value of FTX is about 1.269 billion US dollars.
With the commencement of FTX's settlement, the FTX bankruptcy event is finally nearing its end. After more than two years of transformation, the entire crypto industry has begun a new pattern, and the impact of FTX on the industry has gradually become a part of history. The recent market downturn allegedly triggered by FTX seems more like a storm in a teacup or the panic sentiment of the current market turbulence period.
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