The market for FTX creditor claims is experiencing a surge in activity, with certain claims now reportedly selling for over 50 cents on the dollar. Thomas Braziel, a partner at 117 Partners, a firm specializing in cryptocurrency bankruptcy claims, shared this insight. He mentioned that a claim valued at more than $20 million recently went under the hammer on October 20, fetching between 52 and 53 cents. However, Braziel clarified that such high prices are typically reserved for the best claims. He stated that the market for smaller claims, ranging from $500,000 to $800,000 and more, has significantly strengthened, trading between the higher end of 30 cents and the lower end of 40 cents. But, once again, these rates are only achievable for the cleanest claims with the right buyers.
The increased value of creditor claims appears to align with recent recovery efforts by the bankrupt cryptocurrency exchange and funding endeavors by a company in which FTX had previously invested. Anthropic secured $580 million in a Series B funding round in April 2022, led by Sam Bankman-Fried, the former CEO of the now-defunct FTX. On September 25, Amazon announced a $4 billion investment in Anthropic, which is looking to raise funds with a potential valuation of $30 billion, potentially allowing FTX creditors to receive compensation.
Despite the growing enthusiasm for FTX claims, Braziel acknowledged that some concerns still need to be addressed. The Ad Hoc Committee on Non-U.S. FTX Customers announced a significant win for several companies that have been seeking to sell their claims on the market with the settlement and support plan introduced on October 18. A crucial component of this revised support plan is a "shortfall claim," whereby FTX Debtors anticipate that customers of FTX.com and FTX US will receive a combined 90% of distributable assets, totaling approximately $8.9 billion for FTX.com and around $166 million for FTX US.
Since FTX filed for Chapter 11 bankruptcy protection in November 2022, the FTX debtor estate, under the leadership of new CEO John Ray III, has taken various measures to recover lost assets. This includes selling FTX holdings and receiving substantial incentives from other cryptocurrency companies and former FTX seigniorage, making progress towards resolving customer refund issues and helping trading firms sell their claims.
