Ikigai Asset Management sells a $65 million claim to FTX bankruptcy

Asset management firm Ikigai, which disclosed that most of its hedge fund assets were in FTX when it collapsed, said it had sold its stake in the exchange's bankruptcy proceedings.

On December 22 on X (formerly Twitter), Ikigai Chief Investment Officer Travis Kling said the company sold the $65 million claim to FTX funds because the price was “much, much higher” than expected. Kling did not say at what price the firm sold the claims, but reports suggested some creditors could get as much as 73 cents on the dollar — the highest price since the FTX crash in November 2022.

At the end of the day, the decision to sell the claim is largely an opportunity cost – how much the claim will increase in value, how much money will it raise in the future, and do you think you can get a return by taking the money now and deploying it to something else,” Kling said. “Now that we have received the cash from the sale of the claim, all of our investors who want to withdraw from the fund can do so. Most of the capital remains in the fund.

He added:

I was (and still am) very interested in FTX 2.0. But the debtors have slowed down that process so badly, and progress has been so slow, that it doesn't make sense to hang on to the question of what might happen in 2.0.

**Update**

We recently sold our 65mm request at a loss to FTX.

We were happy with the price and the price was much better than we expected six months ago.

Ikigai will continue as an investment business.

— Travis Kling (@Travis_Kling) December 22, 2023

More than a year after FTX and many of its affiliates filed for bankruptcy, attorneys and brokers continue to ask aggrieved consumers to sell their claims. The benefit to retail investors is that they can get some of their missing funds back sooner rather than waiting months or years for the payoff that FTX borrowers might get.

RELATED: FTX Debtors Assess Value of Crypto Claims Based on Claim Date Market Prices

Some lenders have said on social media that they would rather receive money early to invest in crypto than miss out on a potential bull run. However, if you choose to cash out, you may lose a higher fee after FTX's bankruptcy case is settled.

I don't want to sell my credits for 60% (in USD), I want all my assets back!

— Rappa (FTX Lender) (@RappaAle) December 1, 2023

Among the firms providing cash for FTX claims are Cherokee Acquisition and Open Exchange – a platform backed by Three Arrows Capital co-founders Sue Zhu and Kyle Davis. Bankruptcy Claims Forum reported in June that an FTX lender had filed a claim as collateral for a loan in the decentralized finance (DeFi) protocol Arcade.

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