FTX Creditors Could Collect up to 40% of Their Investments

Jefferies Group, a major global investment bank, has estimated that upto 40% of the money lost by FTX creditors might be recovered.

According to Joseph Femenia, Global Head of Distressed Debt Trading at Jefferies, who spoke in an interview with The Block, creditors of the once a major cryptocurrency which is now bankrupt, may see between 20% and 40% of their assets recovered.

The executive stated that these rates could adjust if there is new data concerning FTX’s balance sheet. Femenia has formed a team of five persons to focus on issues related to the defunct exchange.

According to Femenia’s calculations, the amount that FTX owes its creditors is somewhere between $10 and $13 billion. He explained that somewhere between five and ten percent of that sum will have to go to pay the attorneys and related administrators to handle the clients’ cases.

The executive drew the attention to the fact that consumers of the multi-billion dollar Madoff Ponzi scheme managed to recover over $14 billion but spent almost $1.5 billion for administration costs, which accounted for around 10% of the overall value.

FTX has More Than a Million Creditors

Notably, FTX Trading Ltd. acknowledged approximately $3 billion in debt to its top 50 creditors in a court declaration. The bankruptcy court in the District of Delaware, located in the United States, received it as part of the company’s Chapter 11 bankruptcy filings. 

According to the document, FTX owes around $226 million to a single creditor, with the remaining amount owed lying between $21 and $203 million. In addition, it has been speculated that FTX might have more than a million creditors.

Temasek, Maps.me, Oxygen, Tiger Capital, BlackRock, Thoma Bravo, Sequoia Capital, and a number of other significant names are included in the list of companies that had exposure to the platform before it went bankrupt.