Blockchain Network Solana Looks to Sever Bankman-Fried Connection

Blockchain network Solana is trying to distance itself from one-time booster Sam Bankman-Fried.

As Bloomberg News reported Thursday (Dec. 29), the company has drawn scrutiny within the industry over concerns about Solana’s ties to Bankman-Fried and his failed cryptocurrency exchange FTX.

As such, the report said, Solana’s founders are taking steps to separate their brand from Bankman-Fried, who had appeared with founder Anatoly Yakovenko at conferences to promote the blockchain. That was before FTX declared bankruptcy and Bankman-Fried was indicted on multiple federal charges.

“I’m still trying to square what I perceive him to be and like what actually happened,” Yakovenko told Bloomberg. “It just feels really, really jarring.”

Bankman-Fried was charged by the U.S. Department of Justice (DOJ) earlier this month with eight criminal counts that range from wire fraud to various conspiracy counts. If convicted, he could face decades in prison.

The 30-year-old former crypto wunderkind has maintained his innocence in the events that led to the implosion of his company and the loss of billions of misallocated customer funds. He is due in court next week for his arraignment on the DOJ charges.

As PYMNTS reported earlier this week, new Securities and Exchange Commission (SEC) filings show that “an eCommerce site riddled with errors” was central to Bankman-Fried’s alleged commingling of FTX funds.

According to the SEC complaint, FTX allegedly told customers looking to trade on its exchange to transmit their funds to North Dimension Inc., a purported online electronics seller. From there, the complaint said, FTX pooled that money to make its own trades.

As for Solana’s connection to FTX, Yakovenko told Bloomberg about 4% of teams building projects on Solana now were acutely impacted by FTX’s downfall, while 80% had no exposure to the crypto exchange at all.

“There’s definitely more to Solana than FTX,” Yakovenko said.

The report notes Solana’s crypto token, SOL, has fallen 96% from its all-time high of $260 last November to about $10, hampered by the overall downturn in the crypto market, followed by the collapse of FTX.