One marketplace for distressed claims posted bids for a fraction of the original value of FTX claims

2022/11/16 04:07

According to Coindesk, damaged depositors to the embattled crypto exchange FTX, who face an uphill court battle to recover at least some of their hostaged funds, can sell their credit claims, but they’ll retrieve only a fraction of their holdings. Cherokee Acquisition, a distressed asset investment firm that also has a marketplace for credit claims against bankrupt firms, put a guide price of 8 to 12 cents on a dollar for FTX users' deposit claims over $100,000 in the latest price table sent out Tuesday. When a firm files for Chapter 11 bankruptcy protection as FTX did last Friday or declares bankruptcy, creditors who choose not to wait until the resolution of a lengthy bankruptcy proceeding to recover some or all their assets may sell their credit claims to distressed asset investment companies. The relatively low prices for FTX claims suggest that the probability for FTX users to reclaim their funds is diminished. Even this depressed price tag might turn out to be too high for potential buyers, Thomas Braziel, managing partner at 507 Capital, told CoinDesk. “No one is buying them” at that price, he said. A more realistic market price for deposit claims, he argued, would be closer to 3 to 5 cents.

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