Ikigai, an asset management firm that suffered significant losses when its hedge fund was tied to the collapsed FTX exchange, recently disclosed that it has opted to sell its claim in the exchange’s bankruptcy proceedings.
This decision was shared by Ikigai’s Chief Investment Officer, Travis Kling, in a post on X (formerly Twitter) on December 22.
Kling revealed that Ikigai successfully sold its $65 million claim related to FTX because the offered price exceeded their expectations.
Although he did not specify the exact sale price, reports indicate that creditors might receive up to 73 cents on the dollar – a remarkable figure since FTX’s downfall in November 2022.
Kling shed light on the rationale behind their decision, emphasizing the concept of opportunity cost.
He explained that they weighed the potential future increase in the claim’s value against the immediate cash gain and the opportunity to reinvest it elsewhere for returns.
With the cash proceeds from the claim sale now in hand, Ikigai’s investors have the option to redeem from the fund, but Kling noted that the majority of the capital will remain invested.
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Regarding the much-anticipated FTX 2.0, Kling expressed initial interest but expressed disappointment in the slow and problematic progress of the project, leading them to move away from their claim.
Over a year after FTX and its subsidiaries filed for bankruptcy, lawyers and brokers are urging affected users to consider selling their claims.
This option offers a quicker way for retail investors to recover some of their lost funds, compared to waiting potentially months or years for compensation from FTX debtors.
Some creditors have expressed a preference for receiving funds early so they can invest in cryptocurrencies, potentially capitalizing on a bull market.
However, this choice may come at the cost of missing out on a higher payout if FTX’s bankruptcy case ultimately concludes with more favorable terms.
Various firms, including Cherokee Acquisition and Open Exchange, are facilitating cash transactions for FTX claims.
Additionally, the bankruptcy claims platform Found reported that an FTX creditor used their claim as collateral for a loan within the decentralized finance (DeFi) protocol Arcade, highlighting the innovative solutions emerging within the cryptocurrency ecosystem.
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