The market for FTX creditor claims has witnessed a surge, with claims selling for over 50 cents on the dollar in some instances, as shared by Thomas Braziel from 117 Partners, a firm with expertise in crypto bankruptcy claims. He disclosed to Cointelegraph that a recent auction on October 20 saw a claim worth over $20 million selling for 52 to 53 cents. However, Braziel emphasized that only prime claims typically achieve these rates. Smaller claims, which he categorizes as amounts from $500K to $800K, are trading between 30 and 40 cents, contingent on the quality of the claim and the right buyer.
The rise in creditor claim values seems to be influenced by recent recovery actions from the bankrupt crypto exchange and fund-raising endeavors by Anthropic, a company in which FTX had previously invested. In April 2022, Anthropic secured $580 million in a series B funding round spearheaded by Sam Bankman-Fried, the ex-CEO of the now-inoperative FTX. Amazon’s subsequent $4 billion investment in Anthropic on September 25 raised the potential valuation of Anthropic to $30 billion, consequently elevating FTX’s stake to an estimated $3.5 to $4 billion.
FTX creditors might potentially be compensated in full given the rising valuations. Nonetheless, Braziel highlighted lingering concerns, though he expressed that the growing claim valuations bode well for creditors. He also touched upon the Settlement and Plan Support unveiled on October 18, which represents a victory for many firms intending to offload their claims.
The revised support plan introduces the “shortfall claim”, estimating that FTX customers would collectively obtain 90% of distributable assets. This shortfall is approximated at around $8.9 billion for FTX.com and $166 million for FTX.US. Braziel remarked on the importance of this plan for trading entities wishing to sell their claims.
Since initiating Chapter 11 bankruptcy protection on November 11, 2022, FTX, under new CEO John Ray III, has made strides to reclaim lost assets, encompassing the divestment of FTX holdings and major recoveries from other cryptocurrency entities and ex-FTX seigniorage.
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