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- FTX creditor claims have soared after reports that FTX debtors plan to repay creditors up to 90 percent of their locked funds.
- The trial against Sam Bankman-Fried is edging closer to completion with the prosecution set to rest its case on October 26.
The market for FTX creditor claims has witnessed an unprecedented surge. According to Thomas Braziel, partner at 117 Partners, a firm specializing in crypto bankruptcy claims, each FTX claim is going for more than 50 cents on the dollar. The market expert notes that one claim was selling for between 52 and 53 cents on the dollar at an auction last Friday.
Speaking to a leading news media outlet, the expert noted that on Oct. 20, a claim worth $20 million was sold for between 52 cents and 53 cents at an auction. However, he clarified that only the best claims were selling for such reasonable prices. He stated, “The market has really firmed up for smaller claims, with smaller claims being north of $500K to $800K and up.” He further added that such claims were now trading between the high end of 30 cents and the lower end of 40 cents.
The rise of creditor claims comes amidst recent clawback efforts from the bankrupt crypto exchange. In addition, the company has made tremendous efforts in raising capital from companies it had previously invested in. Furthermore, as CNF recently reported, FTX Debtors have revealed a plan to repay creditors up to 90 percent of their locked funds. If the bankruptcy court approves the plan, these repayments will be made in Q2 2024.
These developments are positive for those involved in the now-defunct crypto exchanges. It further raises optimism that the exchange might get back to operations. Dubbed FTX 2.0, a group of FTX creditors intends to relaunch the collapsed exchange. However, the reboot’s success would be in doubt with many in the crypto community retaining little faith in the exchange. The relaunch of the exchange could take place in 2024 according to the new FTC CEO John Ray III.
https://twitter.com/AFTXcreditor/status/1673992457753616384?
The case against the co-founder and former FTX CEO Sam Bankman-Fried will likely be over by this time. As reported earlier, SBF stands accused of two counts of fraud and five counts of conspiracy. The ongoing case is approaching its final stages with the prosecutions reportedly set to rest its case later this week on October 26.
For the past three weeks, the prosecution has lined up a number of witnesses ranging from former employees of SBF and FTX, co-founders, executives, experts, and law enforcement. The prosecution argues that Bankman-Fried intentionally deceived customers, regulators, employees, and even co-founders leading to the misappropriation of nearly $8 billion in customer funds that were used in investment, political donations, and real estate investment among other misappropriations.
Read More: Shockwaves in Crypto: FTX Founder’s Trial Reveals Desperate Search for Missing Billions
Bankman-Fried will begin his defense on the same date although he has the right to waive the case. Law experts have revealed that although the prosecution has the burden of proof, there is a 95 percent chance of indictment if the government has initiated the case. if found guilty, Bankman-Fried faces decades in prison.
