The bankruptcy evaluation hearing of the bankrupt cryptocurrency exchange FTX is set to take place on the 25th. As the hearing approaches, the price of FTX claims has risen to 80% of the expected payout amount. Creditors are optimistic and expect that the court’s decision at the hearing will favor their claim to receive compensation in the form of “physical” cryptocurrencies.
Last month, FTX submitted a revised restructuring application to the court, seeking to estimate the claim amount of customers’ crypto assets based on the US dollar. They are seeking to calculate the claim amount based on the asset value as of November 11, 2022, the bankruptcy date. The claim evaluation hearing will be held on the 25th.
As the claim evaluation hearing approaches, the price of FTX claims has increased. Cherokee Acquisition, a distressed asset investment company specializing in bankruptcy claims and providing liquidity for FTX claims, revealed that the FTX claim trading price has almost reached $0.8 per dollar.
According to Cointelegraph, the increase in the price of FTX claims is due to creditors’ optimistic expectation that the court’s decision at the hearing will favor their claim to receive compensation in the form of “physical” cryptocurrencies. Their goal is to establish a “physical” repayment framework based on token quantity rather than market price.
In November last year, the FTX claim trading price rose to 57% due to the valuation increase of AI startup Anthropic, which was previously invested in by FTX founder SBF. Now, according to data from Cherokee Acquisition and its subsidiary claim trading platform Claims Market, the FTX claim trading price of over $3 million has surged to 80%.
The increase in the claim price indicates that creditors have gained confidence in receiving a large amount of payout. In comparison, the claim prices of other bankrupt cryptocurrency companies, including Alameda Research, Genesis Global, and Three Arrows Capital, have also surged to 45%, 67%, and 32% respectively.
Meanwhile, FTX creditor Sunil Kavuri pointed out that there have been as many as 153 opposing letters from creditors worldwide, opposing FTX’s proposed restructuring application. This includes retail customers of FTX from South Korea, Hong Kong, Singapore, the United States, Canada, the United Kingdom, Germany, and other countries.
If the original proposal by FTX is followed, there is a significant discrepancy between the prices on the bankruptcy date and the current prices, with BTC at $16,871, ETH at $1258, SOL at $16, and AVAX at $14. Sunil Kavuri expressed dissatisfaction publicly last month and called on creditors to resist.
According to previously released court documents, FTX estimates that it has over 1 million creditors, with debts to the top 50 creditors amounting to $3.1 billion, and the largest creditor being owed $226 million.