Solana Foundation Details FTX, SBF Financial Ties as SOL Struggles

Most major cryptocurrencies are down significantly over the past week amid the destruction of popular exchange FTX, but Solana (SOL) has taken a tougher pounding than most, apparently exacerbated by ties to FTX and founder Sam Bankman-Fried. Today, the Solana Foundation detailed the extent of its financial links to the crumbling FTX empire.

In a blog post, the Solana Foundation said that it had approximately $1 million worth of cash or equivalent assets on FTX as of November 6, before the site stopped processing customer withdrawals. Those assets are now stuck on the platform, pending the results of FTX’s bankruptcy proceedings. The Foundation said that it amounts to less than 1% of its funds.

Furthermore, the Solana Foundation holds approximately 3.24 million shares of FTX Trading LTD common stock, along with about 3.43 million FTT tokens and 134.54 million SRM tokens from decentralized exchange (DEX), Project Serum. Bankman-Fried founded the Solana-based DEX in 2020.

Currently, that stash of FTT tokens is worth about $4.36 million, while the SRM tokens are collectively worth about $29.3 million. However, both tokens have fallen sharply in price over the past week. As of last Monday, November 7, the Foundation’s FTT tokens were worth about $75.5 million, with the SRM worth almost $101 million.

The blog post added that FTX and its affiliated Alameda Research crypto trading firm (also co-founded by Bankman-Fried) purchased over 50.5 million SOL from the Foundation, currently valued at about $708 million. However, a significant portion of that SOL is locked up in monthly unlock schedules that run into 2028.

Solana Labs, the company that represents the founders of and core contributors to the Solana network, also sold over 7.56 million SOL (about $106 million worth) to Alameda Research. All of those tokens will unlock for trading in 2025. CEO Anatoly Yakovenko previously said that Solana Labs was unaffected by the FTX collapse, and held no funds on the exchange.

The Foundation’s disclosures emphasize the extent to which Solana and Bankman-Fried’s companies and projects were heavily intertwined. It also reinforces why FTX’s unraveling has had such an exaggerated impact on the price of SOL over the last week.

As of this writing, SOL is down 57% over the past week at a current price just below $14. Compare that to weekly declines of about 22% for both Bitcoin and Ethereum, per data from CoinGecko. Last night, SOL fell to $12.28—the lowest price registered since February 2021.

The Foundation also noted that around $40 million worth of so-called “Sollet” assets—that is, wrapped Solana versions of major cryptocurrencies like Bitcoin and Ethereum—are impacted by exposure to FTX, as those assets had been backed by the exchange. “The status of the underlying assets is unknown at this time,” the Foundation wrote.

Meanwhile, core developers behind Project Serum are readying a community-led fork of the project to ensure the security of the DEX after FTX was apparently hacked on Friday. FTX holds the key to update the Serum program, according to Mango Markets co-founder Max Schneider, so developers plan to fork the code to free it from FTX’s potentially compromised key.