FTX claim prices are collected before the expected hearing
Claims on crypto exchange FTX have surged ahead of a January 25 valuation hearing, where creditors expect the verdict to support their demand for “in-kind” payments in cryptocurrency.
FTX claims are now trading at about 80 cents on the dollar, according to Cherokee Acquisitions, an investment banking firm that specializes in bankruptcy claims and offers financing on FTX claims.
FTX Claims: Value continues to rise above $1mm for #FTX claims. Since January 12, the market price is 72 bid, 75 ask, up 2 points from last week.
Prices continue to rise in anticipation of the #bankruptcy hearing on January 25th.… pic.twitter.com/NZiuUUVnpA
— Claims Market (@claims_market) January 17, 2024
The X (formerly Twitter) account claims market, managed by the claims firm, continues to rise in price pending a January 25 court hearing where FTX will seek confirmation of the cryptocurrency's price list.
FTX proposes to repay its creditors based on the value of the cryptocurrency on the date of bankruptcy. However, FTX lenders are determined to receive payment “in kind” only for the number of tokens lost, not the market value.
According to data from the Cherokee Acquisition and Claims Market, FTX has increased claims over $3 million by up to 80 percent. In the year By November 2022, FTX's claim value has reached 57%, which can be attributed to the success of FTX's previous investments in artificial intelligence (AI) companies.
Claims up to 80% pic.twitter.com/Qk1beDeZFu
— FTXRELOADED (@FTXRELOADED) January 22, 2024
A higher percentage of claim value indicates confidence among creditors in receiving a higher rate of payment. In comparison, other bankrupt crypto companies such as Alameda Research, Genesis Global and Three Arrows Capital also increased the value of claims by 45%, 67% and 32% respectively.
Meanwhile, FTX's lender said more than 100 letters of objection were filed by retail FTX customers worldwide from South Korea, the United States, Canada and the United Kingdom, among others, opposing the debtor's request to assess the claim.
153 objection letters have been submitted to the borrowers to assess the claims
Letters of objection represent FTX customers from Korea, HK, Singapore to USA, Canada, UK, Germany etc.
Retail FTX users reflect secondary, institutional, non-client demand pic.twitter.com/XNm2gkFueU
— Sunil (@sunil_trades) January 19, 2024
RELATED: Alameda Research grapples with grayscale as GBTC sees breakouts
An estimated one million creditors seek redemption from FTX's collapse. In court filings, FTX says it owes $3.1 billion to its top 50 creditors alone. As shown below, the largest creditor owes $226 million.
FTX disclosed that the top 50 creditors owe $3.1 billion.
The largest lender owes $226 million.
All names have been deleted. pic.twitter.com/JGeddvMB7w
— Tom Dunleavy (@dunleavy89) November 20, 2022
The estate of FTX and Alameda Research has reportedly sold more than two-thirds of Greyscale Bitcoin Trust shares, raising at least $600 million in the process.
#FTX Shocks Market With $1B #Grayscale ETF Selling & Alameda Drops Bombshell Allegation on Grayscale! $GBT
• FTX bankruptcy assets drop Greyscale's Bitcoin ETF by nearly $1 billion, shedding light on recent GBTC flows
— RichQuack (@RichQuack) January 22, 2024
According to Bloomberg, FTX Estate held 22.28 million shares of Grayscale Bitcoin Trust (worth $902 million at the time) before Jan. 11, when the trust converted to an exchange-traded fund.
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