Investors Secure $250 Million in FTX Claims, According to Report
Major credit investors have been rushing to acquire FTX debts, with key players such as Silver Point Capital, Diameter Capital Partners, and Attestor Capital collectively purchasing over $250 million worth of FTX debts in the course of 2023.
Because Bitcoin
September 22, 2023
As per a recent Bloomberg & Cointelegraph report, the market for bankruptcy claims has displayed a growing bullish sentiment towards the debts associated with the defunct cryptocurrency exchange FTX.
Major credit investors have been rushing to acquire FTX debts, with key players such as Silver Point Capital, Diameter Capital Partners, and Attestor Capital collectively purchasing over $250 million worth of FTX debts in the course of 2023. This information is based on an in-house analysis of publicly available court filings.
In addition to these investors, Hudson Bay Capital Management has also entered the fray, reportedly acquiring a $23 million FTX claim and subsequently selling approximately 50% of it to Diameter.
This latest news coincides with FTX restructuring executives urging investors to complete the claims process through the FTX Customer Claims Portal by the September 29, 2023 deadline.
The heightened demand for FTX claims has driven up their prices significantly throughout the year. Some lower-ranked FTX claims, for instance, have seen a remarkable increase of 191%, surging from $0.12 in early 2023 to around $0.35 in recent weeks, according to data sourced from the crypto debt broker Claims Market.
Investors in FTX claims have been accumulating them with the expectation that the bankruptcy process for the firm will ultimately unlock additional value when it is resolved. However, it's important to note that major bankruptcy cases can take years to unwind, and assessing the true value of a collapsed company, especially in the crypto space, can be challenging.
According to some bankruptcy claim investors, the overall value of all traded FTX claims may exceed the $250 million documented in public court records. Notably, some debt transactions may involve months of waiting before paperwork is filed, and there are claims of individual FTX debts exceeding $100 million.
The report also highlights that many investors have been purchasing the rights to FTX crypto accounts with assets still held on the platform after withdrawals were halted in November 2022. For instance, Contrarian Capital Management reportedly acquired an FTX account containing a substantial amount of Bitcoin and Ether, along with $430,000 in cash.
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