Recent activity by the now-bankrupt crypto exchange FTX has ignited anxieties within the Solana (SOL) community. The unstaking of 177,693 SOL tokens, valued at approximately $23.75 million, from the Solana Proof-of-Stake (PoS) network by an FTX-linked wallet has raised concerns about a potential large-scale sell-off that could significantly impact SOL’s price.
While the unstaked tokens have not yet been moved to exchanges for sale, historical patterns suggest that FTX may be preparing for another liquidation event. Earlier this year, FTX sold portions of its Solana holdings to institutional investors, and similar unstaking and transfer activities preceded large SOL sales in late 2023.
Adding to the unease is the sheer size of FTX’s remaining Solana reserves. Data from Solscan reveals that the FTX-associated wallet still holds 7.1 million SOL, currently worth around $953 million. If this substantial amount were to be unstaked and sold, it could exert significant downward pressure on SOL’s price.
Source: Solscan
Concern is RisingThe timing of the recent unstaking, coinciding with an upcoming hearing for former Alameda CEO Caroline Ellison, has also fueled speculation. Ellison’s potential cooperation with legal proceedings could influence FTX’s decisions regarding its Solana holdings.
During her recent testimony, Ellison detailed the inner workings of FTX. For example:
Undisclosed Line of Credit: Ellison, backed earlier testimony by FTX co-founder Gary Wang that FTX had a line of credit where they could withdraw coins even if they didn’t have them. Ellison said Alameda took billions of dollars from FTX customers in this fashion.
The Rise of the “Sam Coins”: Another strategy Ellison was promoting various assets, called “Sam coins”. Solana stood out as being more liquid than the other Sam coins. Alameda was a substantial holder of these coins.
Despite these uncertainties, SOL’s price has demonstrated relative resilience. It’s at $149.43, down 3% today, in line with the wider markets.
However, the looming threat of a large-scale FTX sell-off has prompted many SOL holders to explore hedging strategies to protect their investments.
Source: Brave New Coin
