A number of over-the-counter (OTC) transactions involving FTX creditor claims are valuing these claims at over 50 cents on the dollar. This notable increase in value was revealed by Thomas Braziel, a specialist in FTX debt claims at 117 Partners, following a recent claims auction. The auction saw an FTX claim of more than $20 million sold for 52 cents on the dollar. This suggests that the market now expects FTX creditors to receive approximately half of their money back from the bankrupt exchange.
The positive outlook for FTX creditors
Thomas Braziel noted that the higher valuation only applies to the “largest and cleanest claims.” He shared an article on X expressing the same optimistic sentiment, stating that prices for FTX claims have continued to rise since the initial failure almost a year ago. The article speculates that as the asset recovery process unfolds and illiquid components are sold, such as the venture portfolio, real estate portfolio, and smaller investments, the value of claims is expected to steadily increase. The projected value per claim is estimated to surpass $0.40.
Challenges for FTX creditors
Despite the rising prices of FTX claims, there are challenges that FTX creditors are currently facing. A recent court decision to settle a dispute between Genesis, a bankrupt cryptocurrency lender, and Alameda Research, FTX’s sister company, has caused outrage among FTX creditors. They consider the settlement to be the “worst deal to date” for FTX creditors.
In summary, the surge in the value of FTX creditor claims offers a glimmer of hope for creditors hoping to recover some of their losses. However, challenges and discontentment among creditors remain as they navigate the complex bankruptcy proceedings.
