Solana price down amid fears of FTX dumping

The price of Solana (SOL) dropped more than 6% today amid worries that the token and other crypto assets linked to Solana may soon be liquidated by bankrupt cryptocurrency exchange FTX.

The defunct FTX owns a total of $1.5 billion in crypto assets on the Solana network, according to data from Solscan, which summed up the value of the three publicly accessible FTX cold storage wallets.

Amount of Solana (SOL) held by FTX

Out of the $1.5 billion, Solana tokens account for $128 million.

The remaining sum is made up of a variety of altcoins with a Solana, California, base, including Wrapped Bitcoin (WBTC), Maps token (MAPS), Serum (SRM), and a few more called ‘Sam coins’ in jest at the former FTX CEO Sam Bankman-Fried.

Some people have expressed their worries about the upcoming sell-off on X (formerly known as Twitter). One user posted saying:

Limit of tokens that FTX can dispose

Others, though, have advised restraint because the bankruptcy arrangement actually limits the amount that may be auctioned off at once.

The proposed plan for liquidating FTX’s assets imposes several restrictions on the sale of tokens, according to bankruptcy papers by FTX.

On August 24, FTX put forth a proposal to have Mike Novogratz’s Galaxy Digital Capital Management handle the sale of its recovered cryptocurrency assets. According to this proposal, the FTX estate would be limited to selling a maximum of $100 million worth of its tokens each week, with the option to increase that cap to $200 million per token.

These restrictions were added to lessen the effect of token sales on the overall market while enabling FTX to pay off creditors.

However, the courts have not signed off on FTX’s plan to sell and invest its crypto assets. The plan and several other FTX token sale-related matters are expected to come before the Delaware Bankruptcy Court on September 13, 2023.