Is FTX Estate Betting on SOL with Its $150M Staking Move?

• FTX’s bankruptcy estate stakes $150M in SOL and ETH.
• The exchange staked 5.5 million SOL and 24,000 ETH.
• The staking comes amid the ongoing trial of FTX founder Sam Bankman-Fried.

As the crypto trial of the century against Sam Bankman-Fried unfolds, the now-bankrupt exchange is raising eyebrows. Namely, the FTX bankruptcy estate has staked $150 million in Solana (SOL) and Ethereum (ETH). With significant implications for the altcoins, the move opens new questions about the estate’s financial strategies. Traders also question what this means for Solana, one of FTX’s largest holdings. 

FTX Estate Stakes Millions in SOL and ETH

Over the weekend, blockchain data revealed that the FTX bankruptcy estate staked over 5.5 million SOL, valued at $122 million, and just over 24,000 ETH, worth $30 million. 

On Saturday, October 14, on-chain watchers cited that FTX staked the SOL tokens on Figment. The estate hopes to earn an annualized return of 6.79%—amounting to over $8 million in SOL tokens. Meanwhile, the ETH was staked directly on the Ethereum network, with an expected annualized return of 3.4%, or $1 million in ETH tokens. 

This staking strategy could earn the estate a significant amount over the next few years as rewards are generated on these staked positions. FTX’s decision to stake such a large sum comes after a tumultuous period for the exchange. In September 2023, a court filing revealed that FTX held over $1.16 billion worth of SOL tokens. 

Is the FTX Staking a Bet on SOL? 

At first glance, FTX’s decision to stake a substantial amount in Solana might appear as a high-stakes bet on the altcoin. However, the situation is more nuanced than it seems. FTX can’t simply unload all its SOL tokens on the market without causing a significant drop in their value. Liquidating such a large holding would likely result in a price crash, adversely affecting the estate’s assets and the broader SOL market.

Moreover, staking in any cryptocurrency comes with its own risks, primarily the risk of the underlying asset falling in price. In this case, FTX is already exposed to this risk, given its large holdings of SOL. The staking move doesn’t necessarily introduce new risks but aims to manage existing ones more effectively.

The overarching goal behind this staking strategy is to maximize value for the users and creditors who have claims against FTX. By staking SOL, the estate stands to earn significant returns, which can then be used to settle claims and improve the financial health of the estate. In this light, the staking can be seen as a calculated financial strategy aimed at asset optimization rather than a speculative bet on SOL.

On the Flipside

• While the staking could generate significant returns, it also exposes the estate to the volatile nature of cryptocurrency markets.
• The exchange faced financial scrutiny last year when its balance sheet was questioned. The new CEO, John J. Ray III, has criticized the company’s financial controls.

Why This Matters

For crypto traders, the staking move by FTX’s bankruptcy estate highlights the potential for staking to generate revenue.

Read more about the ongoing FTX trial: 
Shocking FTX Trial Unearths Bitcoin Price Manipulation Plan

Read more about Tether’s new CEO:
Former Tether CTO Paolo Ardoino Takes the Helm as CEO