- Defunct crypto exchange FTX has unstaked and transferred 3.03 million SOL worth $432.5 million to multiple wallets, contributing to a sharp 17% price decline within 24 hours.
- Despite ongoing selling pressure, Solana has shown resilience, with the token adding 1.16% in the past year.
Sam Bankman-Fried’s cryptocurrency exchange, FTX, filed for bankruptcy three years ago after a dramatic collapse stemming from concerns about its close relationship with his trading firm, Alameda Research. With its ongoing efforts to repay customers, the defunct cryptocurrency exchange has unstaked and moved millions of SOL tokens to multiple wallets.
This mouth-dropping transaction has coincided with a significant drop in SOL’s price. This has therefore raised heightened concerns of a potential unfavorable market crash.
FTX Unloads 3.03 Million SOL Worth $432.5 Million
According to data from the on-chain analytics firm Spot On Chain, FTX unstaked approximately 3.03 million SOL, valued at $432.5 million, and transferred them across 37 different wallets.
Notably, one of the largest recipient wallets, identified as “CVjsf5,” received 892,800 SOL ($127.8 million) and has a history of transferring assets to Coinbase, suggesting that a significant portion of these tokens may be heading toward centralized exchanges for every Solana investor’s nightmare – liquidation.
Should this be attributed to mere coincidence or unfortunate circumstances? This massive transaction comes at a time when the general crypto market is experiencing a sideways trend. Whichever the case, the FTX movement appears to have exuberated Solana’s price decline.
As it stands, SOL is swapping hands with $137.22 after recording a catastrophic decline of 13.93%. With a slight recovery, Solana’s native token had endured an earth-shattering collapse, securing the unenviable position of the single largest drop among the top seven crypto giants by market cap after falling by 17%.
Solana’s Circulating Supply Swells Amid Bankruptcy Liquidations
Reminiscing, the recent sell-off is part of a broader liquidation strategy by the FTX bankruptcy, which previously disclosed plans to unlock and distribute 11.2 million SOL in March. Notably, these tokens were sold to companies in an auction following FTX’s collapse in November 2022. The estate aims to use the proceeds from these sales to compensate customers affected by its insolvency.
As ETHNews reported, FTX began repaying users with claims under $50,000 in mid-February, with over $1.2 billion distributed so far. However, the constant unlocking and selling of Solana by the defunct exchange continue to put downward pressure on the asset’s price.
FTX’s SOL Unstaking History and Market Impact
It is worth noting that since 2023, FTX has unstaked approximately 7.83 million SOL, worth around $986 million, at an average price of $125.8 per coin. A large portion of these funds has been funneled into major exchanges like Coinbase and Binance, indicating that further liquidations may be imminent.
Despite this ongoing supply pressure, the influx of unlocked SOL into the market could lead to continued volatility and further price declines in the short term. The selling pressure from FTX, coupled with broader market uncertainty, may soon hinder Solana’s recovery.