FTX's first round of repayment: 11.2 million SOLs are about to be unlocked, causing market selling pressure anxiety

Author: Frank, PANews

On February 18, 2025, FTX's first round of creditor compensation was officially launched, marking the entry of this two-year bankruptcy liquidation into a critical stage. However, the market's attention is focused on another potential risk: on March 1, FTX's bankruptcy auction of 11.2 million SOL tokens will be unlocked, worth up to $1.9 billion. Although the settlement of compensation in fiat currency seems to be "moderate", SOL's huge circulation expectations have caused market concerns, and the aftermath of FTX's asset sell-off will once again impact the crypto ecosystem. Is it over-panicity or is the risk not fully priced?

There are still more than 5 billion outstanding in the first round

According to public information, the creditor's claim for this round of compensation is the initial beneficiary, referring to small creditors whose claim amount is US$50,000 or less. Under FTX's restructuring plan, they will receive full repayment and enjoy 9% annual interest. This group of users may eventually receive 119% fiat currency repayment.

According to FTX creditor Sunil, approximately US$800 million has been paid in this round of repayment, covering 162,000 accounts, accounting for 35% of the estimated 460,000 qualified claim accounts. In addition, repayment of more than US$50,000 will need to wait until after May 30.

Previous reports showed that the total repayment plan for the first phase involved US$6.5 to US$7 billion. This payment round is expected to last until March 4. However, FTX has not announced the actual repayment amount for the first round.

From the perspective of repayment only, since the compensation method chosen by FTX is fiat currency, the repayment may not cause too much turmoil to the crypto market at the beginning, and may also bring some new incoming funds to the market.

OTC SOL tokens worth nearly $2 billion

The market's panic about FTX mainly comes from the auction of crypto assets such as Solana. Documents as of 2023 show that FTX's total assets are still only US$4.77 billion, a gap of US$6.8 billion from the estimated compensation amount of US$11.5 billion at the time. As the crypto market ushers in a bull market in 2024, FTX's crypto assets held in its hands have experienced a sharp rise.

Among them, Solana is the one who has the most blood transfusions to FTX, and the SOL token has increased its largest increase of more than 28 times since December 2022. As one of Solana's main investors, FTX holds a large number of locked SOL tokens. According to the monitoring data of @ai_9684xtpa, FTX has passed three auctions as of February 17, selling 41 million SOLs. Of these, 11.2 million will be unlocked on March 1.

It is reported that the 41 million tokens were not sold directly through the secondary market, but were made by Galaxy (buyed 25.52 million for US$64), Pantera and other buyers (buyed 13.67 million for US$95), Figure and other buyers (buy 1.8 million for USD 102). Overall, these tokens have brought FTX US$2.932 billion in revenue, becoming its largest category of liquidation revenue in the crypto asset class.

Regarding SOL's unlocked tokens, this transaction should have been completed through an auction before, and it will only be delivered after unlocking. Of course, no matter who the ultimate controller is, these tokens will enter circulation, and the known costs of these buyers are far lower than the market price. Therefore, there is indeed a risk of profit selling, but the number of these soon-to-be unlocked SOLs accounts for only 2.3% of the current circulation.

Sui has repurchased its equity, and the disposal methods of APT, AVAX and

other assets are unknown

In March 2024, FTX announced the sale of its shares and tokens invested in Mysten Labs for $95 million. Mysten Labs is a development company for Sui Networks. As of the end of 2024, the shares and tokens sold were worth up to US$4.6 billion. For the market, if FTX retains this part of the token, the SUI market will face greater pressure.

In addition to Solana and Sui, Aptos was also one of the public chains that FTX focused on investing in. According to media data, in 2022, FTX Ventures and Jump Crypto led the Aptos $150 million financing. However, as of now, Aptos has not announced the final processing results of this part of the equity. According to data provided by FTX in March 2023, the number of APT tokens held at that time was 5 million. However, in the ARKM's FTX on-chain address, the data information of APT tokens was not currently found. At the price on February 19, the APT for this portion is worth approximately $31.65 million.

As of February 19, the token with the largest holdings in the FTX on-chain address was FTT, with a total of 257 million tokens holdings, with a value of approximately US$505 million. FTT's total market value is only US$657 million. If it sells its position, the price impact may become the biggest risk. FTX once asked users to fill in the price of purchasing FTT, but FTT is temporarily counted as 0 in fiat currency denominated compensation, and it is not yet certain how the holders of FTT will receive compensation.

In the documents disclosed in 2023, it is shown that FTX also holds 1.42 million AVAX (worth $33.76 million), 36,000 BTC (worth $346 million), 154,000 ETH (worth $410 million), and 29.7 million XRP Major crypto assets such as (valued at US$76.32 million). However, as of February 19, these assets were no longer visible on the wallet address published by FTX and were sold during the liquidation period. As of February 19, FTX's on-chain address holdings were approximately US$1.269 billion.

With the start of FTX's repayment, the FTX bankruptcy incident is finally coming to an end. After more than two years of transformation, the entire crypto industry has begun a new pattern, and the impact of FTX on the industry has become a part of history. The so-called recent market decline caused by FTX seems to be more like catching up on the wind or panic during the current market volatility.