While FTX is keen on refunding the investors based on Nov. 2022 market prices,
FTX creditors aim for an “in-kind” repayment structure that bases the repayments on the number of tokens, not their market prices.
Prices of claims on the crypto exchange FTX have increased ahead of a Jan.
25 estimation hearing, where creditors expect the ruling to favor their demand for “in kind” repayments in cryptocurrency.
FTX claims are now trading at almost 80 cents to the dollar, according to Cherokee Acquisition,
an investment banking firm that specializes in bankruptcy claims and providing liquidity on FTX claims.
X (formerly Twitter) account Claims Market, managed by the claims firm, said prices have
continued to increase in anticipation of a Jan. 25 court hearing where FTX will
seek approval of its list of cryptocurrency prices.
FTX has proposed to pay back its creditors based on the price of cryptocurrency on the day of its
bankruptcy. However, FTX creditors remain determined to receive an “in-kind” payment,
which considers only the number of tokens lost and not the market prices.
According to data reportedly sourced from Cherokee Acquisition and Claims Market,
FTX claims for over $3 million have increased up to 80%. In November 2022,
the claim pricing of FTX had reached 57%, which was previously attributed to the
success of FTX’s investments in artificial intelligence (AI) companies.
A higher percentage claim value reflects a higher confidence among creditors in receiving
sizeable repayments. In comparison, other bankrupt crypto companies, such as Alameda Research,
Genesis Global and Three Arrows Capital, have also substantially increased claims prices by roughly 45%, 67% and 32%, respectively.
Meanwhile, over 100 objection letters against the debtor’s motion to estimate claims have been
filed worldwide from South Korea, the United States, Canada and the United Kingdom,
among others, by retail FTX customers, according to an FTX creditor.
An estimated one million creditors seek redemption from the FTX fallout.
In a court filing, FTX disclosed it owes its $3.1 billion to the top 50 creditors alone. The largest creditor is owed $226 million, as shown below.
The estate for FTX and Alameda Research reportedly sold more than two-thirds of its Grayscale
Bitcoin Trust shares and raised at least $600 million in the process.
According to a Bloomberg report, the FTX estate held 22.28 million shares (worth $902 million at
the time) of the Grayscale Bitcoin Trust before Jan. 11, when the trust was converted into a spot exchange-traded fund.