The claims evaluation hearing of bankrupt cryptocurrency exchange FTX is scheduled to take place on the 25th. As the hearing approaches, the price of FTX claims has risen to 80% of the expected payout amount. Creditors are optimistic and expect that the court’s ruling at the hearing will favor their claim to receive compensation in the form of cryptocurrency “assets.”
FTX, the bankrupt cryptocurrency exchange, submitted a modified reorganization application to the court on the 26th of last month, seeking to estimate the claim amount of customers’ cryptocurrency assets based on the US dollar. They are requesting an evaluation based on the asset value as of the bankruptcy date on November 11, 2022. The claims evaluation hearing will be held on the 25th.
As the claims evaluation hearing approaches, the price of FTX claims has increased. Cherokee Acquisition, a distressed asset investment company responsible for bankruptcy claims and providing liquidity for FTX claims, revealed that FTX claim transaction prices have almost reached $0.8 per dollar.
According to Cointelegraph, the increase in the FTX claim price is due to creditors’ optimistic expectations that the court’s ruling at the hearing will favor their claim to receive compensation in the form of cryptocurrency “assets.” Their goal is to establish a “physical” repayment framework based on token quantity rather than market prices. In November last year, the FTX claim transaction price rose to 57% due to the valuation of AI startup Anthropic, which had received investment from FTX founder SBF. According to data from Cherokee Acquisition and its affiliated claim transaction platform Claims Market, the FTX claim transaction price, exceeding $3 million, has now surged to 80%.
The increase in the claim price indicates that creditors have gained confidence in receiving significant payments. In comparison, the claim prices of other bankrupt cryptocurrency companies, including Alameda Research, Genesis Global, and Three Arrows Capital, have also risen significantly to 45%, 67%, and 32% respectively.
Meanwhile, FTX creditor Sunil Kavuri pointed out that there have been as many as 153 letters of opposition from creditors worldwide, including retail customers from South Korea, Hong Kong, Singapore, the United States, Canada, the United Kingdom, Germany, and other locations. These letters oppose the reorganization application proposed by FTX. If FTX’s original proposal is followed, there would be a significant discrepancy between the prices on the bankruptcy date and the current prices: BTC at $16,871, ETH at $1258, SOL at $16, and AVAX at $14. This has led Sunil Kavuri to publicly express dissatisfaction last month and urge creditors to stand up and resist.
According to previously disclosed court documents, FTX is estimated to have over one million creditors, with debts to the top 50 creditors amounting to $3.1 billion and owing $226 million to the largest creditor.
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