The market for FTX creditor claims is heating up, according to Thomas Braziel, a partner at 117 Partners, a firm specializing in crypto bankruptcy claims. Braziel revealed that a claim worth over $20 million recently traded for between 52 and 53 cents on the dollar.
Market Dynamics for Smaller Claims
Smaller claims, valued between $500,000 and $800,000, are also seeing increased interest. These are now trading between 30 and 40 cents on the dollar. Braziel emphasized that only the “cleanest” claims with the right buyers are achieving these prices.
The rise in claim values is linked to FTX’s recent bankruptcy developments and capital-raising efforts by companies it had previously invested in. In April 2022, Anthropic secured $580 million in Series B funding led by Sam Bankman-Fried, the former CEO of FTX. Amazon’s $4 billion investment in Anthropic further boosted the company’s valuation, indirectly benefiting FTX creditors.
Legal and Regulatory Concerns
While the market for FTX claims is bullish, there are still regulatory hurdles to overcome. Issues related to Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations continue to surface.
According to the FTX creditor coalition, the rising valuation of Anthropic could potentially make FTX creditors whole. The “shortfall claim,” a crucial part of the amended support plan, estimates that FTX.com and FTX US customers could collectively receive 90% of distributable assets.
The increasing value of FTX creditor claims is a positive sign for the market and could have far-reaching implications for both small and large creditors. However, regulatory challenges remain, requiring careful navigation by all parties involved.
