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Crypto Fire Sale: Pantera Circles FTX Wreckage, Eyes Discounted Solana

Last Updated March 7, 2024 1:21 PM
Teuta Franjkovic
Last Updated March 7, 2024 1:21 PM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • Crypto asset manager Pantera seeks $250 million to buy Solana tokens from FTX at a 39% discount.
  • FTX’s estate aims to sell SOL holdings and generate liquidity for creditors, potentially mitigating market impact.
  • This created an opportunity, because SOL price is four times higher than when FTX collapsed.

Pantera Capital, a crypto-focused asset manager with assets worth $5.2 billion, is actively seeking  funds from major investors.

The aim is to purchase Solana tokens at a deep discount from the now-bankrupt crypto exchange, FTX.

Pantera Capital Targets Solana Token Acquisition from FTX Estate

Pantera Capital is raising capital for its Pantera Solana Fund , eyeing an “opportunity” to acquire up to $250 million in SOL tokens. It announced this news in February marketing materials which were shared with potential investors.

The fund offers investors the chance to purchase SOL tokens at a 39% discount off the 30-day average price, or $59.95. This, however, all depends on investors agreeing to a vesting period of up to four years. Such strategies, like the one proposed by Pantera, would enable FTX liquidators, under the leadership of John J. Ray III, to divest SOL tokens and generate liquidity for creditors, mitigating immediate impacts on the crypto’s market price.

According to Pantera’s proposal , the FTX estate possesses 41.1 million SOL coins, valued at $5.4 billion. This represents around 10% of SOL’s circulating supply.

FTX and Pantera did not immediately respond to a request for comment.

Solana’s Price Surge Creates Opportunity for FTX Estate

In the past year, Solana (SOL) witnessed a remarkable increase of nearly 650%, while the cryptocurrency bull market accelerated. Therefore, the FTX estate now has a valuable chance to generate funds for creditor repayment.

Currently, the coin’s value is about four times higher than its price at the time of FTX’s collapse in November 2022. Sam Bankman-Fried, co-founder and former CEO of FTX, who is facing sentencing on fraud charges, was a significant supporter of the Solana network.

claims market
Credit: Claims Market by Cherokee Acquisition

According to details  from an investor pitch, Pantera aimed to finalize the fund by the end of February. A source familiar with the situation reported that the Menlo Park, California-based company succeeded in raising some funds by the targeted deadline. However, the individual, who chose to remain anonymous, did not disclose the exact amount raised.

Investor Commitments and Solana’s Ecosystem Investments

Investors must contribute a minimum of $25 million each, facing an initial lock-up of SOL that will vest over four years. Pantera intends to apply a management fee of 0.75% and a performance fee of 10%.

Furthermore, FTX and its affiliate, Alameda Research, not only held substantial quantities of SOL tokens but also significantly invested in startups within the Solana ecosystem. In November 2021, FTX’s venture division, along with Solana Ventures and Lightspeed Venture Partners, unveiled a $100 million blockchain gaming fund.

Since its inception in 2020, Solana has emerged as a competitor to Ethereum, facilitating a variety of crypto-oriented applications. Data from The Block Research  shows the network having than 20 million monthly active addresses for the past three months. As a result, it seems to have rebounded from a period of decreased activity following FTX’s bankruptcy.

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