The prices of claims at the cryptocurrency exchange FTX have increased as creditors anticipate a decision in their favor regarding cryptocurrency repayments before the estimation hearing on January 25th. According to Cherokee Acquisition, an investment banking firm specializing in bankruptcy claims that provides liquidity for FTX claims, FTX claims are currently trading at nearly 80 cents on the dollar.
FTX Claim Pricing on the Rise
The creditor-managed X account Claims Market reported that prices continued to rise ahead of the court hearing on January 25th, where FTX is expected to seek approval for its cryptocurrency price list. FTX has offered to repay its creditors based on the cryptocurrency prices on the day it declared bankruptcy. However, FTX creditors are determined to receive a payment that considers only the number of lost tokens, not the market prices.
According to data from Cherokee Acquisition and Claims Market, claims over $3 million in FTX have increased by up to 80%. In November 2022, FTX’s claim pricing had reached a rate of 57%, which was previously attributed to the success of FTX’s investments in artificial intelligence (AI) companies.
A higher percentage of claim value reflects greater confidence among creditors in receiving substantial repayments. Conversely, significant increases have also been observed in the claim prices of other bankrupt cryptocurrency companies such as Alameda Research, Genesis Global, and 3AC Loans.
What’s Happening in the Bankruptcy Process?
Amidst these developments, according to an FTX creditor, over a hundred objection letters have been submitted by individual FTX customers residing in South Korea, the United States, Canada, and the United Kingdom against the debtors’ claim estimation request.
Approximately 1 million creditors are trying to recover from the FTX bankruptcy process. FTX disclosed in a court filing that it owed $3.1 billion to just the top 50 creditors, with the largest creditor owed $226 million, as shown below.
It was revealed that FTX and Alameda Research sold more than two-thirds of their shares in the Grayscale Bitcoin Trust (GBTC), raising at least $600 million in the process.
According to a Bloomberg report, FTX held 22.28 million shares of Grayscale Bitcoin Trust before January 11, and in recent weeks, the trust was converted into a spot exchange-traded fund (ETF).
