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- 1 FTX Exchange, once the third biggest crypto exchange, is now declared bankrupt, is trapped in a never-ending game.
- 2 FTX creditors claim a fetching price of around 50 cents on the dollar in an auction that was held last week.
FTX Exchange, one the most popular cryptocurrency exchanges, is now in highlights, but in a balky sense. The exchange got trapped in new scams on a daily basis, making it challenging for the platform to get back on track. In an auction held on Friday, October 20, the FTX creditor claimed a fetching price of approximately 50 cents on the dollar.
Why is FTX Not Recovering?
Thomas Braziel, partner at 117 Partners, a firm accountable for handling crypto bankruptcy claims, came up with a big breaking. The news was related to the claiming of creditors for around 50 cents on the dollar in an auction. The news was confirmed by Braziel in an interview with the cointelegraph.
In an auction held on 20 October 2023, the FTX creditors picked up around 50 cents on the dollar. According to Braziel, a claim valued at more than $20 Million was recently sold for around 50 cents at auction. The claims are trading between 30 cents to 40 cents and the cleanest claims with the right buyer are permitted to sell at these prices.
The value of creditors’ claims appears to follow recent clawback efforts from the FTX exchange, as well as capital-raising efforts from a firm it had previously invented.
FTX Exchange is alleged for using customers’ funds in an illegal way which resulted in FTX’s bankruptcy. In the past few weeks, the court ordered FTX to return customers’ funds with 90% of the platform’s assets to be distributed to the users. In April 2022, Anthropic, an AI safety and research company raised $580 Million in a Series B funding round held by FTX. Similarly, Amazon announced a $4 Billion investment in the AI safety firm, making FTX’s investment in Anthropic worth between $3.5 Billion and $4 Billion.
The Claim
FTX is trapped with lots of allegations and is expecting to resolve the issue as soon as possible. Regardless of the rising enthusiasm for FTX claims, Thomas addressed some concerns that need mitigation. However, the rising valuation of claims seems to be a good sign for creditors.
Recent settlement and support plan announcements by the court can be seen as a significant win for several firms that are directly or indirectly looking to sell their claims on the market. Shortfall claim is one of the key factors of the support plan which helps in estimating the customers of FTX.com and FTX US who would receive the distributable assets.
Currently, the shortfall claim is predicted around $8.9 Billion for FTX.com and $166 Million for FTX US. “For all the trading companies and market-making firms, the settlement agreement is going to be really helpful”, added Braziel.
Conclusion
Shortfall claim is a major component of the support plan that will help FTX in determining the customers who would receive the funds. A claim valued at more than $20 Million was sold for around 50 cents at an auction held on October 20. Also, the cleanest claims with the right buyer will be allowed to sell at these prices.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
