Investors Actively Trading FTX Claims in Unregulated Market
According to an analysis of FTX’s court documents by Bloomberg, investors are actively trading FTX claims in an unregulated market for bankruptcy claims. The Claims Market data shows that FTX debts are trading at approximately 35% of their original claim value. These claims can represent various things, including customer deposits and electricity bills owed by the exchange.
Bloomberg’s analysts have observed significant trading activity, with more than $250 million worth of FTX debts sold to three investors: Silver Point Capital, Diameter Capital Partners, and Attestor Capital. They also noted a $23 million claim from a “fortune cookie distributor” sold to Hudson Bay Capital Management.
The report suggests that the actual number of claim trades may be higher than reported, exceeding $100 million, as some investors wait months to document their trades officially.
Increase in Demand for FTX Claims
The market price of FTX claims in the secondary market has experienced a surge, rising from around 15% at the beginning of 2023 to its current value. This increase in demand can be attributed to the progress made by the FTX restructuring team led by John J. Ray III and ongoing court proceedings involving Sam Bankman-Fried and his parents.
Expectations of Claim Buyers
Crypto trader Benson Sun suggests that claim buyers are expecting a 100% return on their investments in five years. However, various factors can influence the conditions of the secondary market going forward, including clawbacks, changes in claim scale, restructuring timelines, bid offers, and asset liquidation prices.
FTX Customers’ Deadline for Contesting Claims
According to recent court filings, FTX customers have until September 29, 2023, to contest their scheduled claims. As of now, only 10% of individual claimants have agreed with their claims, while 18% have disputed them. Some users have reported issues with the KYC process, but FTX has clarified that it is not mandatory to have a verified KYC status to submit a claim.
Hot Take: Investors Actively Trading FTX Claims in Unregulated Market
Investors are actively trading FTX claims in an unregulated market for bankruptcy claims. The market price of these claims has surged due to the progress made by the FTX restructuring team and ongoing court proceedings involving Sam Bankman-Fried and his parents. Claim buyers are expecting a 100% return on their investments in five years. FTX customers have until September 29, 2023, to contest their scheduled claims. It remains to be seen how these factors will impact the secondary market conditions moving forward.
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