With the gradual recovery of the cryptocurrency market and FTX Group entering the final stage of bankruptcy reorganization, the prices in the FTX debt market have also risen. As of December 22nd, the redemption price per dollar has reached 67 to 72 cents. Taking advantage of this trend, cryptocurrency asset management firm Iikigai Asset has sold off its claims.
Cryptocurrency exchange FTX announced its entry into bankruptcy reorganization in November last year due to misappropriation of customer assets. The collapse of FTX has had a wide-ranging impact, with over 70 investment institutions affected, including prominent Western institutions such as Multicoin, Genesis, and Paradigm.
Overwhelmed by the limitation of funds, which restricted liquidity, Galois Capital, one of the world’s largest cryptocurrency quantitative fund with $200 million under management, decided to halt all trading and positions in February this year. They returned 90% of the funds to clients that were not locked in FTX, and the remaining 10% will be discussed later. They also urgently sold their FTX debt claims at 16% of the original price.
However, with the gradual recovery of the cryptocurrency market and FTX Group entering the final stage of bankruptcy reorganization, according to data from Cherokee Acquisition, the prices in the FTX debt market have risen from 50 to 53 cents per dollar at the end of October to 67 to 72 cents per dollar on December 22nd, an increase of more than 34%.
In response to this, Iikigai Asset, a cryptocurrency asset management firm that once had all its assets on FTX, has sold its £65 million claim. Travis Kling, the founder of Iikigai Asset, tweeted that the decision to sell FTX debt claims was mainly based on considering opportunity costs, which involves weighing and comparing the potential growth of debt prices in the future with the returns that can be obtained by obtaining cash and investing in other assets. Although Travis Kling did not disclose the specific amount of funds trapped in FTX, he mentioned that Iikigai Asset is currently regrouping. They have opened up new subscriptions to existing investors for the first time since the collapse of FTX, and their investors are currently injecting new capital into the firm. They have also made adjustments to internal mechanisms to prevent a repeat of the FTX bankruptcy tragedy.