Solana Blockchain Keeps Its Head Above Water Amid Sam Bankman-Fried’s Rapid Empire Collapse

Nov. 15, 2022
Solana Blockchain Keeps Its Head Above Water Amid Sam Bankman-Fried’s Rapid Empire Collapse

The Solana blockchain faces the hardest-hit digital assets this week amid a sharp sell-off in cryptocurrency markets brought on by the quick demise of Sam Bankman-business Fried’s empire. 

The situation worsened much more on Friday after the former billionaire’s primary holding company sought bankruptcy protection. SOL is also selling at around $13, down 58% over the last seven days, and that is a 93% decrease from the peak reached in November.

A discussion regarding Solana’s long-term prospects, the prospects for the blockchain, and how seriously this week’s sector upheaval may damage the recent volatility has spurred it among cryptocurrency experts, blockchain developers, and executives.

Solana has long been a favorite of FTX, Bankman-Fried, and Alameda Research, a trading company he also created. Before filing for bankruptcy, FTX provided a balance statement with investors showing that the exchange owned $982 million in SOL.

Today’s update to The Solana Foundation’s blog entry, “Facts Related To FTX Bankruptcy,” illustrates how exposed it was to FTX and Alameda. The company’s assets consist of about 3.24 million shares of FTX Trading LTD ordinary stock, 3.43 million FTT tokens, valued at $4.5 million at the time of writing, and 134.54 million SRM (Serum) tokens, valued at $28 million at the time of writing.

Solana Ecosystem Facts Related To FTX Bankruptcy

The Solana Foundation said in its update that Most of the larger DeFi projects on Solana have low or no exposure to FTX, based on a recent study by Solana Foundation. But there are undoubtedly projects that are affected by FTX, and those projects appear to be actively trying to find a solution, but the results are not yet available. 

The blog post claims that locked tokens cannot be moved on-chain until the lock has expired and are placed into locked stake accounts. Locked tokens can be staked and divided into smaller stake accounts, but until the lock has expired, the tokens in the stake accounts cannot be moved on-chain.

Moreover, Solana Foundation also clarifies that by the time FTX.com stopped processing withdrawals on November 6th, it had about $1M in cash or currency equivalents. The impact on the operations of the Solana Foundation is minimal because this represents less than 1% of its cash or financial equivalents. It didn’t even have SOL custody on FTX.com.

The blog post states that:

In light of the voluntary Chapter 11 bankruptcy proceedings that FTX/Alameda announced on November 11th, we do not know how these and other FTX/Alameda’s assets will be settled in the aftermath of the Chapter 11 proceedings.

 

Ammar Raza

Associate editor
Ammar Raza is an individual with a strong interest in the world of cryptocurrency. He has written extensively on topics such as non-fungible tokens, decentralized apps, and blockchain technology. In addition, he is passionate about collaborating with innovative companies to drive meaningful change.

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