FTX’s claims prices have experienced a remarkable
surge, reaching almost 80 cents to the dollar amid an anticipated hearing of a
dispute between the bankrupt crypto exchange and its creditors.
According to a report by Cointelegraph, FTX is
advocating for a refund process based on the market prices for November 2022,
while creditors are pushing for a payment system based on the number of lost
tokens, regardless of market values.
FTX’s proposal to reimburse creditors based on
cryptocurrency prices on the day of its bankruptcy has encountered staunch
opposition. The clash in perspectives has intensified in the lead-up to the
estimation hearing, resulting in FTX claim prices skyrocketing to nearly 80
cents on the dollar.
Cherokee Acquisition, a prominent investment banking
firm specializing in bankruptcy claims, has reported a surge in FTX claim
prices. The data reveals that claims exceeding $3 million have experienced an
increase of 80%, reflecting growing confidence among creditors in receiving
substantial repayments.
Claims prices increased up to 80% pic.twitter.com/Qk1beDeZFu
— FTXRELOADED (@FTXRELOADED) January 22, 2024
This surge places FTX ahead of other bankrupt crypto
companies like Alameda Research, Genesis Global, and Three Arrows Capital,
which have also seen significant spikes in claim prices.
FTX Faces Scrutiny
FTX’s woes extend beyond the courtroom, with over
100 objection letters filed globally against the debtor’s motion to estimate
claims. Retail FTX customers from South Korea, the United States, Canada, the
United Kingdom, and more have voiced their concerns.
With an estimated one million creditors seeking
redemption from the FTX’s fallout, the stakes are high. FTX disclosed a
staggering $3.1 billion debt to its top 50 creditors alone, with the largest
creditor owing $226 million.
FTX claims: prices for #FTX claims over $1mm continue to increase. Market prices as of January 12 were 72 bid, 75 ask, up 2 points from the prior week.
Prices continue to increase in anticipation of the #bankruptcy Claims Estimation Hearing on January 25.… pic.twitter.com/NZiuUUVnpA
— Claims Market (@claims_market) January 17, 2024
Recently, FTX
sold $1 billion worth of its shares in Grayscale Bitcoin Trust (GBTC), causing $2
billion in withdrawals by investors since GBTC was converted into an ETF.
According to a report by Finance Magnates, FTX’s
actions significantly contributed to the reported $2 billion outflows from
GBTC. The crypto exchange leveraged the price disparity between GBTC and the
underlying Bitcoins. As of October last year, the crypto exchange held 22.3
million GBTC shares valued at $597 million.
However, the decision to liquidate this stake at
$900 million coincided with the launch of Grayscale’s Bitcoin ETF on January
11, triggering a decline in the value of Bitcoin.
FTX’s claims prices have experienced a remarkable
surge, reaching almost 80 cents to the dollar amid an anticipated hearing of a
dispute between the bankrupt crypto exchange and its creditors.
According to a report by Cointelegraph, FTX is
advocating for a refund process based on the market prices for November 2022,
while creditors are pushing for a payment system based on the number of lost
tokens, regardless of market values.
FTX’s proposal to reimburse creditors based on
cryptocurrency prices on the day of its bankruptcy has encountered staunch
opposition. The clash in perspectives has intensified in the lead-up to the
estimation hearing, resulting in FTX claim prices skyrocketing to nearly 80
cents on the dollar.
Cherokee Acquisition, a prominent investment banking
firm specializing in bankruptcy claims, has reported a surge in FTX claim
prices. The data reveals that claims exceeding $3 million have experienced an
increase of 80%, reflecting growing confidence among creditors in receiving
substantial repayments.
Claims prices increased up to 80% pic.twitter.com/Qk1beDeZFu
— FTXRELOADED (@FTXRELOADED) January 22, 2024
This surge places FTX ahead of other bankrupt crypto
companies like Alameda Research, Genesis Global, and Three Arrows Capital,
which have also seen significant spikes in claim prices.
FTX Faces Scrutiny
FTX’s woes extend beyond the courtroom, with over
100 objection letters filed globally against the debtor’s motion to estimate
claims. Retail FTX customers from South Korea, the United States, Canada, the
United Kingdom, and more have voiced their concerns.
With an estimated one million creditors seeking
redemption from the FTX’s fallout, the stakes are high. FTX disclosed a
staggering $3.1 billion debt to its top 50 creditors alone, with the largest
creditor owing $226 million.
FTX claims: prices for #FTX claims over $1mm continue to increase. Market prices as of January 12 were 72 bid, 75 ask, up 2 points from the prior week.
Prices continue to increase in anticipation of the #bankruptcy Claims Estimation Hearing on January 25.… pic.twitter.com/NZiuUUVnpA
— Claims Market (@claims_market) January 17, 2024
Recently, FTX
sold $1 billion worth of its shares in Grayscale Bitcoin Trust (GBTC), causing $2
billion in withdrawals by investors since GBTC was converted into an ETF.
According to a report by Finance Magnates, FTX’s
actions significantly contributed to the reported $2 billion outflows from
GBTC. The crypto exchange leveraged the price disparity between GBTC and the
underlying Bitcoins. As of October last year, the crypto exchange held 22.3
million GBTC shares valued at $597 million.
However, the decision to liquidate this stake at
$900 million coincided with the launch of Grayscale’s Bitcoin ETF on January
11, triggering a decline in the value of Bitcoin.