FTX’s current claims price has reached a high of 57%, according to Claims Market data. FTX’s claims price increase is attributed to the valuation of artificial intelligence (AI) companies in which the now-bankrupt crypto exchange previously invested.
Creditors assert their claims to try to recover part of their investment when companies experience financial difficulties or go bankrupt. Based on estimates of the total amount recovered, investors frequently trade these claims. The estimated recovery value increases when the price of a loss increases.
As the value of FTX’s investment in these AI companies increased, so did the potential amount that could be recovered from its bankruptcy proceedings. A claim is a legal assertion of a certain monetary amount.
The Claim Percentage value refers to the percentage of the investment amount that is expected to be recovered on the platform. FTX claims that the value has soared to the highest compared to other failed crypto companies, such as Celsius with 35-40%, Genesis with around 50%, Alameda with 10%, and Three Arrows Capital with only 7-9 %.
The increase in FTX claims also comes as the public trial of former FTX CEO Sam Bankman-Fried concludes on November 2, with the jI will find him guilty on all seven counts. The judge will announce the sentence in March 2024.
The FTX claims have been a major topic of discussion within the crypto community throughout the bankruptcy proceedings. Previously, the judge in the case allowed FTX to sell nearly $3.4 billion in crypto assets on the market to compensate creditors. With the price of cryptocurrencies rising and the valuation of the companies FTX has invested in increasing, creditors have a good chance of returning a significant portion of their lost money to FTX.