FTX just sold nearly $2 billion of SOL at a steep discount. Here’s what that means for creditors

The bankrupt crypto exchange FTX has sold about two-thirds of its $2.6 billion in Solana tokens in a deeply discounted deal, Bloomberg reported on Friday.

The bankruptcy administrators overseeing FTX’s estate sold SOL at $64 per token, sources close to the matter told Bloomberg, raising up to $1.9 billion for the estate. The token, however, was trading at around $177 at the time of publication, according to CoinDesk, although it’s down 6% in the past day.

“I think it is a great deal for the people buying the SOL, but I feel like creditors lost out,” FTX customer and founder of claims-buying platform FTX Creditor Louis d’Origny, told Fortune. “We should have been able to realize the proceeds over time as opposed to instantly. The debtors clearly see no value in crypto assets.”

Buyers in the deal included Galaxy Trading (an arm of Mike Novogratz’s Galaxy Digital) and Pantera Capital. Galaxy Trading reportedly raised close to $620 million for a fund set up to buy the SOL from the FTX estate, and will charge investors in the vehicle a 1% management fee while offering them a staking yield.

Last August, FTX also hired Galaxy Asset Management, another Galaxy Digital unit, to take control of selling off the vast pile of cryptocurrencies held by the estate.

Asset manager Pantera has reportedly also raised money for a fund to buy up to $250 million of SOL from the estate, Bloomberg reported last month. Vancouver-based software company Neptune Digital Assets announced last week that, too, it bought $1.7 million worth of SOL.

Judge John Dorsey, who’s overseeing the case, ruled in January that each claim should be valued on what the creditor was owed on the day FTX filed for bankruptcy. But on Nov. 11, 2022, SOL traded at $16—about 9% of its current market price.

Solana didn’t respond to a request for comment.

At the sentencing of FTX cofounder and former CEO Sam Bankman-Fried, one victim, Sunil Kavuri, railed against the selling of discounted tokens before Judge Lewis Kaplan, arguing that the assets are owned by the exchange’s former customers, who, to be made whole, should be the ones realizing those gains. “Sam continues to lie that we will all be paid in full,” he told the court, rejecting the view that FTX customers are “unsecured creditors.”

“I think Galaxy’s private wealth management is winning,” Thomas Braziel of 117 Partners and a broker of bankruptcy claims told Fortune, referencing how the company has secured both a role in the estate’s disinvestment and as a buyer of assets. “They gave themselves a pretty sizable allocation.”

“I don’t think shareholders have a right to be pissed about the discount—that’s just the market,” Braziel added, saying he sees the discounts reducing for additional blocks of tokens. “First we start with a big discount, and then you make the discount smaller over time based on market feedback. It’s just like how you would move anything as a banker.”

This story was originally featured on Fortune.com