FTX Liquidators’ Strategic Staking
On-chain data reveals a significant move by FTX liquidators who staked a substantial portion of their Ethereum (ETH) and Solana (SOL) holdings over the weekend.
Ethereum Staking Details
According to Etherscan data, the bankrupt crypto exchange staked approximately $30 million worth of ETH, equivalent to more than 24,000 ETH, on October 14th. Prominent blockchain analytical firm 0xScope confirmed this development, highlighting that a wallet associated with FTX liquidators staked 4,416 ETH, valued at around $6.85 million, through Figment, an institutional-focused staking service provider.
Solana Staking Activity
Simultaneously, the liquidators staked 5.5 million Solana tokens, amounting to approximately $121 million, via Figment. This strategic move allows FTX to earn a rewards rate of nearly 7% as per Figment’s calculations.
Understanding Staking and Rewards
Staking involves committing crypto assets to support a blockchain network for a specific period, allowing participants to earn rewards. Figment, the staking service provider in this case, boasts an average Staking Rewards Rate (SRR) of 4.5% throughout the third quarter, while Ethereum’s official website indicates a reward rate of 3.4% annually.
FTX’s Blockchain Investments
FTX had been a major investor in the Solana blockchain, holding over $1 billion worth of SOL tokens, as revealed in court filings. The exchange also had substantial holdings in other digital assets like Bitcoin (BTC) and Ethereum.
Background and Ongoing Trial
It’s worth noting that this staking activity occurred amidst the ongoing criminal trial of Sam Bankman-Fried, the founder of the now-defunct exchange. The trial has shed light on alleged mishandling of FTX customers’ funds. Key insiders, including Gary Wang, co-founder of FTX, and Caroline Ellison, former CEO of Alameda, testified that Alameda had special privileges at the exchange, with Bankman-Fried allegedly establishing systems enabling fraudulent activities.