FTX claim prices soar, but experts caution against unsustainable rally News ▸ US ▸ FTX ▸ Bankruptcy
FTX claim prices soar, but experts caution against unsustainable rally
FTX claims value has rallied despite the recent release of an "underwhelming" reorganization plan.
2 min read
Updated: Dec. 21, 2023 at 12:33 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
FTX creditor claims recent rally is unsustainable, according to Vladimir Jelisavcic, founder and manager of Cherokee Acquisition—a crypto bankruptcy brokerage firm.
In a Dec. 20 post on X (formerly Twitter), Jelisavcic stated that the “price increases for FTX claims should slow down soon,” because “this level of appreciation can’t be sustained for much longer.”
Jelisavcic’s opinion stems from the recent uptrend in value claims of the bankrupt cryptocurrency exchange in the past weeks. According to data from Claims Market, FTX claims have rallied by more than 25% since November to a maximum of 69% as of Dec. 15.
FTX ‘underwhelming’ reorganization plan
Interestingly, the claims value increase is coming amid FTX’s recently released reorganization plan that could potentially lead to millions of dollars worth of losses for the defunct crypto exchange’s creditors.
Sunil Kavuri, one of the most prominent creditors of the bankrupt firm, said:
“The reorganization plan goes against FTX’s Terms of Service, which stated that the titles to digital assets belonged with customers and not the exchange.”
Claims Market further described the plan as “underwhelming,” adding that the disclosure statement left many key points unresolved.
Why is FTX claims rallying?
The surge in FTX claim prices can be linked to several key factors. Chief among them is FTX’s strategic investment in Anthropic, an artificial intelligence startup that enjoys the backing of big technological companies like Google and Amazon.
CryptoSlate previously reported that FTX’s stake in the company could surge to as much as $4.5 billion if its valuation increased to between $20 billion and $30 billion.
Earlier today, reports emerged that the firm was discussing raising $750 million in a funding round led by Menlo Ventures at a $15 billion to $18 billion valuation.
Additionally, FTX’s substantial investment in Solana’s SOL, a cryptocurrency that surged by an impressive 773% on the year-to-date metric to around $86, has also played a role in amplifying the value of the claims.
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In this article
Solana is a high-performance blockchain platform that utilizes a unique consensus algorithm called “Proof of History” to achieve fast transaction speeds and low fees.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Anthropic
Anthropic is a US-based artificial intelligence (AI) startup and public-benefit corporation founded by former members of OpenAI in 2021.