🚨Breaking _News
A series of funds are racing to buy the right to claim FTX debt 🏦💸
The #FTX debt rights market has started to get exciting as large investors are rushing to buy FTX's debts. 💼📈
According to #Bloomberg, investors such as Silver Point Capital, Diameter Capital Partners and Attestor Capital bought more than $250 million worth of FTX debt in 2023, according to an analysis of court documents. 📊📚
FTX's debt also attracted investors such as Hudson Bay Capital Management. They reportedly bought $23 million worth of FTX claims and later sold about 50% to Diameter. 🔍💼💰
In line with rising demand, the price of FTX debt claims has skyrocketed this year. Low-grade FTX debt claims have increased 191%, from $0.12 at the start of 2023 to around $0.35 in recent weeks, according to a report based on data from crypto debt broker Claims Market. 💥📈
According to Claims Market's chart, the "bid" and "ask" prices of large FTX claims have also increased this year. This shows that debt investors have increased their accumulation of debt claims against FTX Group, betting that the exchange will repay a much larger amount of debt than the cost of purchasing the certificates. The risk, however, is that large bankruptcies can take years to resolve and it is difficult to know the value of a collapsed company, especially in the cryptocurrency sector. ⚖️📊💰💥
Besides buying debt collection rights, many investors even buy ownership rights to FTX accounts whose assets are stuck on the exchange. Debt investment firm Contrarian Capital Management reportedly purchased an FTX account holding large amounts of Bitcoin (BTC) and Ether (ETH), along with $430,000 in cash. 💻💰
The above information comes in the context that there is only one week left before creditors send debt collection requests to FTX. ⏳💼📆
Some cryptocurrency bankruptcies have taken years to resolve. MT. Gox, a major cryptocurrency exchange that was hacked in 2014, recently postponed its deadline to return Bitcoin to investors for another year. Year-to-date, Bitcoin has increased more than 3,000% since Mt. Gox bans users from withdrawing cryptocurrency after hack. 🔒💸🔓
