The market for FTX creditor claims is experiencing a surge in activity, with some claims now fetching prices exceeding 50 cents on the dollar.
Thomas Braziel, a partner at 117 Partners, a firm specializing in crypto bankruptcy claims, revealed this development.
He disclosed that a recent claim worth over $20 million was sold for between 52 and 53 cents at an auction held on October 20th.
However, Braziel pointed out that only the highest-quality claims command such prices.
Smaller claims in the range of $500,000 to $800,000 and above have also seen an uptick in value, trading between 30 and 40 cents.
Again, Braziel emphasized that these prices are reserved for the most pristine claims with the right buyer.
The increase in the value of creditor claims appears to be tied to recent clawback efforts by the bankrupt crypto exchange and capital-raising activities of a company in which it had invested.
In April 2022, Anthropic secured $580 million in a Series B funding round led by Sam Bankman-Fried, the former CEO of the now-defunct FTX.
Subsequently, Amazon announced a $4 billion investment in Anthropic on September 25th, potentially valuing the company at $30 billion.
This development could have a positive impact on FTX creditors, potentially making them whole.
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Despite the growing enthusiasm for FTX claims, Braziel cautioned that certain concerns, particularly related to KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance, still needed to be addressed.
However, the overall trend of increasing claim valuations bodes well for creditors.
Braziel highlighted the significance of a settlement and plan support announced by the ad hoc committee of non-U.S. FTX customers on October 18th.
A key component of this amended support plan is the “shortfall claim,” which estimates that customers of FTX.com and FTX US would collectively receive 90% of distributable assets, with an estimated value of approximately $8.9 billion for FTX.com and $166 million for FTX US.
This development is particularly beneficial for trading firms seeking to sell their claims.
Since filing for Chapter 11 bankruptcy protection on November 11, 2022, the FTX Debtors’ estate, led by new CEO John Ray III, has undertaken various measures to recover lost assets.
These measures include selling FTX holdings and initiating significant clawbacks from other crypto firms and former-FTX seigniorage.
The market for FTX creditor claims is evolving rapidly, offering both challenges and opportunities for stakeholders in the crypto landscape.
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