March 27, 2024
FTX Soars 57% After Sam Bankman-Fried's Guilty Verdict
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FTX Soars 57% After Sam Bankman-Fried’s Guilty Verdict

FTX’s claim pricing has recently surged to a peak of 57%, as reported by data from the Claims Market. This increase in claim pricing is attributed to the enhanced valuation of artificial intelligence (AI) companies that the now-bankrupt crypto exchange had previously invested in.

In situations where businesses encounter financial difficulties or bankruptcy, creditors assert their claims in an attempt to recover a portion of their investment. Investors often engage in trading these claims based on their estimated total recovery value. When the pricing of a claim rises, it indicates a potential increase in the amount recoverable. As the value of FTX’s investments in AI companies soared, so did the potential recovery amount from its bankruptcy proceedings. A claim represents a legal assertion of a specific monetary sum.

Comparatively, FTX’s claim percentage value has reached the highest level among bankrupt crypto firms. For instance, Celsius stands at 35–40%, Genesis at approximately 50%, Alameda at 10%, and Three Arrows Capital at only 7–9%.

This surge in FTX’s claim pricing coincides with the conclusion of the public trial of former FTX CEO Sam Bankman-Fried on November 2. The jury found him guilty on all seven charges, and the sentencing is scheduled for March 2024.

Throughout the bankruptcy proceedings, FTX’s claims have been a prominent topic of discussion within the crypto community. Previously, the judge presiding over the case permitted FTX to sell nearly $3.4 billion worth of crypto assets in the market to compensate creditors. With the escalating prices of cryptocurrencies and the growing valuations of the companies FTX had invested in, creditors now have a substantial opportunity to recover a significant portion of their lost investments from FTX.

Image by macrovector on Freepik

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