March 27, 2024
FTX Claim Prices Surge Before Estimation Hearing
Latest Cryptocurrency News

FTX Claim Prices Surge Before Estimation Hearing

Prices of claims on the crypto exchange FTX surge ahead of a Jan. 25 estimation hearing, where creditors anticipate a favorable ruling for “in-kind” cryptocurrency repayments.

FTX claims are now trading at nearly 80 cents to the dollar, reported by Cherokee Acquisition, a bankruptcy claims and liquidity specialist.

The Claims Market Twitter account, managed by Cherokee Acquisition, notes rising prices in anticipation of FTX’s Jan. 25 court hearing to approve its list of cryptocurrency prices.

FTX proposes creditor repayment based on cryptocurrency prices on bankruptcy day, but creditors insist on “in-kind” payments, considering only lost token numbers, not market prices.

Per data from the Cherokee Acquisition and Claims Market, FTX claims over $3 million have surged up to 80%, showing increased confidence among creditors. In November 2022, FTX claim pricing reached 57%, attributed to successful investments in AI companies.

Other bankrupt crypto companies, like Alameda Research, Genesis Global, and Three Arrows Capital, also substantially increased claims prices by about 45%, 67%, and 32%, respectively.

Over 100 objection letters globally, from countries like South Korea, the U.S., Canada, and the U.K., contest the debtor’s motion to estimate claims, filed by retail FTX customers.

FTX, facing redemption requests from one million creditors, disclosed a $3.1 billion debt to its top 50 creditors, with the largest owed $226 million.

The FTX estate and Alameda Research reportedly sold over two-thirds of their Grayscale Bitcoin Trust shares, raising at least $600 million, following the trust’s conversion into a spot ETF on Jan. 11, as per Bloomberg.

Image by Freepik

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