FTX Claims Trading Near 35% of Debt Amount in Secondary Markets

Investors are actively scooping FTX claims in an unregulated market for bankruptcy claims, according to a Bloomberg analysis of FTX’s court documents.

According to Claims Market data, FTX debts are trading at approximately 35% of their original claim value.

The claims can represent anything from customer deposits to electricity bills owed by the exchange.

Bloomberg’s analysts recorded a sale of more than $250 million worth of FTX debts to three investors in Silver Point Capital, Diameter Capital Partners and Attestor Capital.

They also saw a $23 million claim from “fortune cookie distributor” sold to Hudson Bay Capital Management for an unspecified amount.

The report added that more claimshave likely changed hands than reported currently—in excess of $100 million—as investors “sometimes wait months to file the paperwork documenting a trade.”

The market price of claims in the secondary market has surged, rising from approximately 15% at the beginning of 2023 to its current value.

This increase in demand is likely due to the progress made by the FTX restructuring team led by John J. Ray III, and ongoing court proceedings involving jailed FTX founder Sam Bankman-Fried and his parents.

The percentage value of FTX claims in the claims market. Source: Claims Market

According to popular crypto trader Benson Sun, claim buyers are expecting a 100% return on their investments in five years.

Sun added that various factors can influence the secondary market conditions moving forward, such as the possibility of clawbacks, changes in claim scale, restructuring timelines, bid offers, and asset liquidation prices.

這陣子協助大家提交 claim 時很常被問到一個問題：FTX 到底會不會賠錢？如果賠錢會賠多少錢？

最客觀的方式是看二級市場債權的價格
Claim market 上面 FTX 債權 (net deposit) 收購價已經上升到 35% 左右（見圖一、圖二），而且呈現每月逐漸上升的趨勢

我問過一個 claim buyer… pic.twitter.com/Cm8qUuxBd6

— Benson Sun (@BensonTWN) September 22, 2023

FTX customers have a week to contest claims

According to the latest court filings dated September 11, around 72% of individual claimants have to agree with or dispute their scheduled claims. Only 10% have agreed with their claims and another 18% disputed them.

Some users have reported facing issues in the KYC process. However, the firm has clarified by saying that it’s only necessary to “begin the KYC process. It is not mandatory for you to have a verified KYC status in order to submit a claim.”

Customers have until September 29, 2023 to file a proof of claim if they dispute their scheduled claim.

Source