Solana plummets 50% with assets stranded on failed FTX exchange
The Solana Foundation has tens of millions of dollars in cryptocurrencies stranded on the beleaguered FTX exchange and in the past week the value of its sol token has plummeted by over 50%.
On Monday, Solana (SOL-USD) released a statement about its deep exposure to Sam Bankman-Fried’s collapsed exchange and its trading arm, Alameda Research.
The statement on the platform’s website read: “Solana Foundation asset exposure to FTX/Alameda.
“As of 11/14/22, the Solana Foundation has exposure to the below assets.
“These assets were held on FTX.com accounts, and continue to be held there, as of 11/6/22 when FTX.com ceased to process withdrawals; ~3.24m shares of FTX Trading LTD common stock, ~3.43m FTT tokens, ~134.54m SRM tokens.”
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SRM (SRM-USD) tokens refer to serum tokens which are related to a Solana blockchain decentralised finance (Defi) application in which Bankman-Fried was heavily involved.
Since the collapse of the FTX exchange and the downfall of Bankman-Fried, the SRM token has dropped from around $0.80 each to $0.22 (GBPUSD=X).
The FTT (FTT-USD) token is the native cryptocurrency of the FTX exchange, it has also plummeted in value and can be seen as a proxy sentiment indicator for Bankman-Fried and his FTX/Alameda Research organisation.
The FTT token has fallen from around $22 to approximately $2 since the FTX crisis began.
The Alameda Research website is now not accessible stating “the site is currently private”, and the FTX.com online exchange has been closed to traders and all user funds locked.
The relationship between Solana and Bankman-Fried runs deep, with the ethereum rival benefiting from the fallen crypto tycoon’s support in an early 2021 funding round to the tune of $314m.
Now Solana’s native cryptocurrency, sol, is haemorrhaging value by the hour and the Swiss-based blockchain foundation has tens of millions of dollars worth of crypto and common stock stranded on FTX.com.
According to the Financial Times, FTX held $982m in sol as revealed in a balance sheet shared with investors just before the firm filed for bankruptcy.
Solana’s close ties with Bankman-Fried, FTX, and Alameda has worried investors and developers alike, which has been reflected in the value of sol dropping 93% from its all-time high in November 2021.
Many of the decentralised finance tokens on Solana, or “Sollet assets”, were believed to be listed, issued and backed by the FTX exchange.
The collapse of FTX has seen the Solana blockchain-based “Sollet assets” spiral downwards in value, causing a rupturing of value throughout the whole Solana ecosystem of decentralised applications and digital assets.
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