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Bankrupt crypto trading platform FTX Derivatives Exchange is making headlines today as it continues its bankruptcy proceedings. Based on recent movements, on-chain data shows that the exchange has bought back some of its Solana (SOL) locked in POS staking.
FTX and Solana: Genesis
Solscan data shows that wallets connected to FTX or Alameda Research exchanged 177,693 SOL worth about $24 million. While the exact reasons for this exchange remain unclear, speculation is limited.
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First, the FTX exchange needs as much operational funds as possible to finance its ongoing bankruptcy proceedings. The cost of lawyers, paying staff and related entities makes this an ideal solution for the trading platform.
In its early days, the FTX exchange was a major supporter of Solana. Thanks to Alameda Research’s investment, the trading platform received a colossal allocation of SOL, making it one of the largest holders of the cryptocurrency.
When FTX went bankrupt, Solana was pressured by the company’s exposure. This contributed to the massive collapse in SOL’s price after FTX’s implosion. Although the cryptocurrency’s price and activity have rebounded to their pre-FTX bankruptcy levels, FTX’s influence remains visible.
After the latest buyback, the FTX exchange still has 7.057 million SOL worth $954 million in stake.
And then?
FTX is in the final stages of bankruptcy. The company is notably consolidating its funds to repay its creditors. On this basis, it is very likely that the company will repurchase the entire $954 million of SOL staked in the coming months.
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As for what the future might hold for FTX, the company aims to reboot the exchange to pave the way for a fresh start. While nothing has been said about it so far, future SOL liquidations could significantly disrupt the price of the digital currency.
At the time of writing, Solana was trading at $134.91, up 2.36% in 24 hours. With a 9.6% increase in trading volume to $2,018,446,819, it is becoming clear that the FTX buyout has not sparked fears of a massive sell-off for SOL, as is customary.
