The market is warming up to FTX claims, with a single claim fetching between 52 and 53 cents on the dollar at Friday’s auction.
According to Thomas Braziel, partner at 117 Partners, a firm specializing in crypto bankruptcy claims, the market for FTX creditor claims has been heating up, with some claims purportedly selling for more than 50 cents on the dollar.
Braziel told Cointelegraph that a claim worth more than $20 million recently sold at auction on October 20 for between 52 cents and 53 cents, though he noted that typically only the finest claims reach this price, adding:
“The market has really firmed up for smaller claims, with smaller claims being north of $500K to $800K and up.”
“Those claims are now trading between the high-end of 30 cents and the lower end of 40 cents,” he added, reiterating that only the “cleanest” claims with the right buyer could sell at these prices.
The increased value of creditor claims appears to result from recent clawback efforts by the bankrupt crypto exchange and capital-raising efforts by a company in which the exchange had previously invested.
Sam Bankman-Fried, the former CEO of the now-defunct FTX, led Anthropic’s series B funding round in April 2022, raising $580 million.
Amazon announced a $4 billion investment in Anthropic on September 25. Anthropic seeks to raise capital at a prospective valuation of $30 billion, valuing FTX’s investment in the company between $3.5 and $4 billion.
According to a post from the FTX creditor coalition on October 4, this valuation may be sufficient to make FTX creditors whole.
Braziel added that despite the growing enthusiasm for FTX claims, concerns still needed to be resolved, but overall, the rising value of claims was a positive sign for creditors.
“There’s still a lot to iron out. KYC and AML issues are still popping up.”
Braziel stated that the Settlement and Plan Support announced on October 18 by the Ad Hoc Committee of non-U.S. FTX customers was a significant victory for several companies attempting to sell their claims on the market.
A crucial component of the amended support plan is the “shortfall claim,” in which FTX debtors estimate that FTX.com and FTX US customers would collectively receive 90% of distributable assets.
The estimated shortfall claim for FTX.com is $8.9 billion, and for FTX.US, it is $166 million.
“They were kinda stuck with a bag they really couldn’t sell because it was really unclear how customer clawbacks were going be treated,” said Braziel.
“For all the trading and market-making firms, the planned support agreement and the draft outline are really helpful for trading firms to be able to sell their claims.”
Since FTX initially filed for Chapter 11 bankruptcy protection on November 11, 2022, the FTX Debtors’ estate, led by new CEO John Ray III, has taken a number of steps to recover lost assets, including the sale of FTX holdings and significant clawbacks from other crypto firms and former-FTX seigniorage.
