Non-Performing Asset Fund Buys FTX Bankruptcy Claim in Private OTC Market

02/21/2023 00:39 • Metaverse Matters • 148 views

According to the report, according to the source, the non-performing asset fund bought the bankruptcy claim right of FTX at a maximum face value of 20% in the private over-the-counter (OTC) market. FTX currently owes $3.1 billion to the 50 largest creditors. The valuation of FTX’s non-performing assets in the bankruptcy trading market is about 16% of the face value of the claim, and the individual claims being sold on the bankruptcy market XClaim are as high as $27 million. （CoinDesk）

The non-performing asset fund is purchasing FTX non-performing assets at a maximum face value of 20%

Analysis based on this information:

The message pertains to the purchase of FTX’s bankruptcy claim right by a non-performing asset fund, in the private over-the-counter (OTC) market. The fund paid a maximum face value of 20% to acquire this claim right. FTX, which owes $3.1 billion to its 50 largest creditors, has a valuation of non-performing assets in the bankruptcy trading market, which is about 16% of the face value of the claim. Furthermore, the individual claims being sold on the bankruptcy market, XClaim, are as high as $27 million.

It is important to note that FTX is a well-known player in the crypto industry, offering derivatives trading in digital assets. However, they filed for bankruptcy in May 2022, citing financial problems mainly due to a significant loss incurred during the market crash. As a result, FTX’s assets may not be sufficient to pay off its debts, and it is likely that creditors will only receive a portion of their dues.

In this situation, non-performing asset funds have come into play, taking advantage of the private market to purchase bankruptcy claims. These funds invest in distressed assets, including companies facing bankruptcy or restructuring, and aim to recover as much value as possible by acquiring assets at a steep discount.

According to the reported message, the non-performing asset fund in this scenario paid a maximum of 20% of the face value of the FTX claim. This implies that they are optimistic of recovering a significant portion of the claim amount, which bodes well for the creditors who hold these claims. However, it is important to keep in mind that the true value of the assets in question may not be fully realized, especially given the volatile nature of the crypto industry.

In conclusion, the purchase of FTX’s bankruptcy claim right by a non-performing asset fund in a private OTC market is a typical strategy of funds investing in distressed assets. It remains to be seen what the ultimate outcome of this strategy will be, particularly in the context of the crypto industry’s volatile nature. Nonetheless, it is evident that non-performing asset funds provide an alternative option for distressed companies and their creditors to maximize value in difficult situations.

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Non-Performing Asset Fund Buys FTX Bankruptcy Claim in Private OTC Market

The non-performing asset fund is purchasing FTX non-performing assets at a maximum face value of 20%

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