FTX Creditors Set to Receive Triple Payouts as Estate Recovers $7.3 Billion: Matrixport Report Reveals

FTX is the biggest fall in the crypto industry and so is the impact. But what is more complicated is the recovery process that met with severe setbacks in past. FTX, the crypto exchange currently going through a complex bankruptcy process, has seen the expected payouts to creditors triple in value over the course of this year. The anticipated recovery for FTX creditors has reached an average of 37 cents on the dollar, compared to just over 10 cents at the start of 2023, according to data from crypto services provider Matrixport.

Does FTX’s $7.3B Recovery Revive a Lost Empire?

It is quite astonishing that this recovery expectation can be attributed to FTX’s successful efforts to recover and reclaim assets under the leadership of John Ray III, a Wall Street bankruptcy lawyer. Additionally, FTX reported that it had managed to marshal $7.3 billion worth of assets, including $3.4 billion in cryptocurrencies, $1.1 billion in cash, and $200 million in real estate. 

Will investors believe FTX 2.0 resurgence even if they regain the amount? 

Matrixport said that while the FTX recovery process is nearly complete, a $2.1 billion claim against Binance and a $700 million lawsuit from investment firm K5 could increase creditor payouts. On the top FTX’s $500 million stake in AI startup Anthropic may expand due to Amazon’s proposed investment. However, FTX’s strategic Anthropic stake considerations add spice to the story. FTX’s financial picture is complicated by the possibility of large gains, which could change its direction.

FTX 2.0’s unprecedented opportunity

Nevertheless, the anticipated resurgence of the FTX exchange, often referred to as “FTX 2.0,” could also hold promise for creditors. Successful recapitalization of an exchange has been achieved before, with creditors becoming equity owners, potentially benefiting claims holders. Experts also suggest that to resolve its bankruptcy, FTX could potentially conduct an IPO using Anthropic Tokens distributed to creditors.

It is worth noting that, the growing optimism regarding asset recovery has generated significant demand for FTX creditor claims in over-the-counter markets. Distressed asset investors are actively seeking FTX claims, with the claims market seeing a surge in activity, making FTX claims one of the most sought-after assets in the bankruptcy claims market.

A Ray of Hope for Creditors? 

In the ongoing process, FTX’s bankruptcy case has been described as one of the messiest in U.S. history, with founder and CEO Sam Bankman-Fried facing a criminal trial next week. Despite the complexity of the case, the improved recovery expectations have fueled interest in FTX claims among investors. This development is a positive sign for FTX creditors, as they anticipate higher payouts than previously expected.