- The bankruptcy of cryptocurrency exchange FTX has led to increasing optimism about creditor recoveries, with some claims now trading for over 50 cents on the dollar.
- Reasons for growing optimism include FTX’s stake in AI company Anthropic attracting major new investments, a clearer picture of recoverable assets emerging, and estimates that final recoveries could reach 80-90% or more.
- While uncertainties remain, the outlook for FTX creditors has significantly improved since the exchange’s collapse, with claim values rising and creditors increasingly hopeful of substantial recoveries.
The bankruptcy of cryptocurrency exchange FTX has left many investors wondering if they’ll ever recover their lost funds. However, there are some positive signs that creditor claims may increase in value.
Increasing Value of FTX Claims
In late October, some over-the-counter (OTC) trades of FTX creditor claims closed at over 50 cents on the dollar. This represents a significant increase from January, when many expected to recover only 25% of lost funds.
Some creditors are now being offered as much as 60-65 cents on the dollar for larger claims. However, only clean, multi-million dollar claims are likely to fetch the higher end of that range.
Reasons for Optimism
There are a few reasons for the growing optimism around creditor recoveries:
- FTX purchased a large stake in Anthropic, an AI company. Anthropic has since attracted major new investments. Creditors hope selling FTX’s stake in Anthropic will return significant funds.
- As the FTX bankruptcy process continues, the potential value of recoverable assets becomes clearer. This has led to a better understanding of how much creditors may eventually recover.
- The outlook for FTX creditors seems likely to keep improving. According to claims specialist Thomas Braziel, recoveries could approach 80-90% or more of lost funds.
While nothing is guaranteed, the situation for FTX creditors appears to be trending in a positive direction. With growing claim values, many creditors are more hopeful of significant recoveries than in the aftermath of FTX’s shocking collapse.