FTX creditors have recently been encouraged to take part in the bankruptcy estate’s planned auction of the remaining Solana token holdings. The CEO of Figure, Mike Cagney, announced that the next round of sales would be conducted through an auction format, a shift from the previous direct sales to venture capital firms. This new approach opens up the opportunity for retail investors affected by the exchange’s collapse to get involved in the process with a minimum investment requirement of $5000, a much more accessible option compared to the $5 million required by FTX.
Figure Markets’ Special-Purpose Vehicle (SPV)
In order to facilitate retail investor participation in the auction, Figure Markets will establish a special-purpose vehicle (SPV) to compete. Accredited US and non-US investors will have the opportunity to engage in the auction after passing a mandatory KYC process. The SPV will operate based on community consensus to determine bid prices and manage investments effectively. It will accept investments in various forms, including the US Dollar, USD Coin stablecoin, Bitcoin, and Ethereum.
Despite the efforts to involve retail investors in the auction process, the defunct exchange has not provided clear information about the proceedings. The SOL tokens held by FTX hold significant value, and the exchange has been selling them at discounted rates. This has led to criticism from FTX creditors who believe that these sales have negatively impacted their assets. One creditor, Sunil Kavuri, expressed discontent with FTX’s actions, stating that the devaluation of their assets through these sales is unfair.
Kavuri also mentioned the possibility of legal action against FTX, emphasizing that the losses incurred by creditors due to the discounted sales will be addressed through class action lawsuits. The sale of SOL tokens at a price significantly lower than the market value has raised concerns about the fairness and transparency of the process. The involvement of legal entities like Sullivan & Cromwell adds another layer of complexity to the situation, as creditors seek to protect their interests and assets.
The bankruptcy auction of FTX’s remaining Solana token holdings has sparked a debate among creditors regarding the fairness and implications of the sales. The introduction of a new auction format and the creation of an SPV by Figure Markets aim to involve retail investors in the process. However, concerns about the impact on creditors and the lack of transparency in the auction process highlight the challenges faced by stakeholders in navigating the aftermath of FTX’s collapse.