According to data from Claims Market, FTX’s claims pricing has currently reached a maximum of 57%. The increase in FTX claims pricing has been attributed to the valuations of artificial intelligence (AI) companies in which the now-bankrupt cryptocurrency exchange had previously invested.
When a business encounters financial difficulties or goes bankrupt, creditors file claims in an attempt to recoup some of their investment. Investors often trade these claims based on estimates of the total amount recovered. When claims pricing increases, so does the estimated recovery value.
As the value of FTX’s investments in these artificial intelligence companies surges, so does the potential amount that can be recovered from their bankruptcy proceedings. A claim is a legal claim for a certain amount of money.
The claim percentage value here refers to the amount the platform expects to recover. FTX saw the highest jump in claim value compared to other bankrupt crypto companies, such as Celsius around 35-40%, Genesis around 50%, Alameda 10%, and Three Arrows Capital (3AC) only 7% to 9%.
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The surge in FTX claims comes as the public trial of former FTX CEO Sam BankFried concluded on November 2, with a jury finding the tainted CEO guilty on all seven charges. The judge in the case will announce the sentencing in March 2024.
FTX claims have been a major topic of discussion in the crypto community throughout the bankruptcy proceedings. Previously, the judge in the case allowed FTX to sell nearly $3.4 billion worth of crypto assets on the market to compensate creditors. As cryptocurrency prices rise and the valuations of companies in which FTX invests continue to rise, there is a good chance that creditors will return a large portion of their lost funds from FTX.
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