More trouble for Solana and other ‘Sam coins’ as FTX-affiliated projects like Serum attempt to recover

November 14, 2022, 4:42 PM UTC
Illustration by Fortune

The fallout from the collapse of Sam Bankman-Fried’s FTX continues to rattle so-called Sam coins and projects, including Solana’s SOL and Solana-based “decentralized” exchange Serum.

For years, Solana has been a favorite of Bankman-Fried’s, FTX, and Alameda Research, a trading firm Bankman-Fried also founded. According to an FTX balance sheet shared with investors just before the firm filed for bankruptcy, the exchange held $982 million in SOL.

Solana’s close ties with Bankman-Fried, FTX, and Alameda has worried investors and developers alike, which has been reflected in the market. The price of SOL is down 58% in the past seven days, currently trading at around $13. That’s down 93% from its all-time high in November.  

The Solana Foundation today updated its “Facts Related To FTX Bankruptcy” blog post, detailing its exposure to FTX and Alameda. The firm’s assets include about 3.24 million shares of FTX Trading LTD common stock; 3.43 million FTT tokens, worth $4.5 million at current prices; and 134.54 million SRM (Serum) tokens, worth $28 million at current prices.

“These assets were held on accounts (and continue to be held there) as of 11/6/22 when ceased to process withdrawals,” the post reads.

With many worried about the state of the Solana ecosystem due to its proximity to Bankman-Fried and FTX, the Solana Foundation added in its update: “Most of the largest DeFi projects on Solana had limited or no exposure to FTX, based on a recent assessment by Solana Foundation.”

“There are certainly projects with exposure to FTX and those projects seem to be actively working to figure out a way forward, but the outcomes there are not yet known,” the post read.

What’s more, the biggest asset listed on the FTX balance sheet was $2.2 billion of SRM, the token representing Serum, which as tanked 71% in the past seven days, trading at around $0.22. Along with its connection to battered FTX, an apparent $600 million hack on FTX also pushed down SRM prices, stoking fears that Serum’s private keys might be at the mercy of FTX and former employees. After all, Serum was created by Bankman-Fried to begin with.

“The hack shows that someone malevolent has access to private keys at FTX,” pseudonymous Rooter, a Solend developer, recently told CoinDesk

In turn, Serum developers forked the program to separate from FTX and protect the entity. 

“The devs that depend on Serum are forking the program because the upgrade key to the current one is compromised,” Solana founder Anatoly Yakovenko tweeted on Saturday. “This has nothing to do with SRM or even Jump. A ton of protocols depend on Serum markets for liquidity and liquidations.”

Time will tell how many assets and projects heavily associated with Bankman-Fried recover.

“The industry will have a better lay of the land when we can look months or even weeks ahead, but right now everyone is taking things by the hour,” Dexterity Capital cofounder Michael Safai recently told Fortune.

This story has been updated to include new information on Solana’s exposure to FTX.

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.