Investors of FTX, Celsius Network, Others Sells Off Claims

It all seems to be coming to an end for many creditors of troubled crypto firms like FTX that filed for bankruptcy in 2022.

With no plan to wait any further for the lengthy bankruptcy proceedings, a large number of investors with claims in FTX, Celsius Network, Voyager Digital, and BlockFi have decided to transfer them to other investment firms. These investors do not intend to wait out the bankruptcy process or even find out the verdict at the end.

Customers of all aforementioned crypto exchanges and hedge funds are now selling their claims at huge discounted prices which is a far cry from their initial value. FTX users with about $1 billion in credit claims have announced their intention to sell them off through Cherokee Acquisition, an investment banking firm. On the Cherokee market, each dollar of FTX claims goes for around 8 to 12 cents.

Over 10,000 Users Claims on Xclaim

Xclaim is another bankruptcy claims trading platform which recently redirected its focus to crypto-linked claims and at present, it has listed $92 million of FTX users’ claims. Over 10,000 claims were listed on Xclaim with 9,072 claims on Celsius Network, 93 claims on Voyager, 67 claims on FTX and 23 claims on BlockFi. 

In an interview with the Wall Street Journal, the founder of Xclaim Matt Sedigh noted that the company has been receiving calls from investors who can no longer wait for lengthy draining bankruptcy proceedings which may eventually hold no benefit from them. According to Sedigh, two third of these investors with claims are located in Hong Kong, China, and Taiwan.

As users of these defunct crypto firms are searching for where to sell off their claims, several hedge funds and debt investors have also been on the lookout for such opportunities to grab. So far, Contrarian Capital Management, Invictus Global Management and NovaWulf Digital Management have purchased some of these users’ claims. 

While creditors are looking for a way out, since his arrest and release based on a $250 million bail bond, the former Chief Executive Officer (CEO) of FTX Sam Bankman-Fried has made up to $684,000 from a Seychelles-based crypto exchange thereby, violating one of the conditions of his release.