Stop the FUD, HEre's Why FTX Can't Sell Its Solana Holdings
Reportedly, FTX is seeking approval for its liquidation of $3.4 billion in SOL, FTT, BTC, ETH, and other crypto asset holdings. Crypto exchange FTX held Solana as a major part of its reserves. However, they sold SOL in huge quantities when the exchange crashed last year in November 2022.
Of the total $3.04 billion in crypto assets held by FTX, Solana constitutes the lion’s share. As of January 17, FTX’s cryptocurrency holdings were estimated to consist of approximately $685 million in Solana (SOL) tokens, $529 million in FTT tokens, $268 million in Bitcoin (BTC), $90 million in Ethereum (ETH), along with a range of other assets, including Aptos, Dogecoin, Polygon, XRP, and various stablecoins.
Will FTX Really Sell Solana Holdings?
However, many people seem to have overlooked a significant detail. The SOL tokens held by FTX debtors are not immediately available for sale. In contrast to the impression conveyed by the shared visual data, these SOL tokens are subject to a lockup agreement. FTX, in conjunction with Alameda, had previously obtained 16% of the SOL supply directly from the Solana Foundation.
This acquisition came with certain conditions, primarily a lockup schedule. The current holding of 47.51 million SOL, which represents 8.82% of Solana’s eventual total supply, is bound by this agreement.
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Must ReadHence, the misconception that this SOL reserve is readily tradable and poised for a market sell-off is fundamentally incorrect. The fact is that these tokens are locked and will follow a linear vesting process spanning from 2025 to 2028.
According to the terms of the agreement, the SOL tokens will experience gradual monthly releases until January 2028. Furthermore, specific tranches, such as the 7.5 million SOL acquired from Solana Labs by Alameda Research, will only become accessible on March 1, 2025. Another tranche of 61,853 SOL is set for unlocking on May 17, 2025.
Thus, there’s little reason for investors to panic amid all the FUD around Solana at this point.