- FTX investors may see some recovery in their affected fund.
- Crypto companies like BlockFi, Sequoia Capital, Galaxy Digital and more were affected in the event.
- The FTX group filed for bankruptcy Chapter 11 on November 11.
Jeffries Offer Some Hope to Investors
The investors slept agitated on November 10th, 2022 thinking about what would come out of this churn involving the biggest crypto exchange and FTX. Their fear came true the very next day as Sam Bankman-Fried filed for Chapter 11 for bankruptcy. Now that things have escalated, with the company seeing John Ray stepping up as new CEO and SBF getting arrested in the Bahamas, an investment bank, Jeffries, said in an interview that investors can see up to 40% fund recovery.
Jeffries’ Joseph Femenia said in the interview that the company’s liabilities appear between $10 Billion to $13 Billion against $2 Billion to $3 Billion assets. The lawyers’ fees will play a vital role in the scenario considering the anticipated charges ranging from $500 Million and $1 Billion. This may reduce the recovery rate to between 10% to 35%.
When a structure goes down the collateral is inevitable. The fall of Sam Bankman-Fried’s empire took others down with it. Genesis says that their market activities will remain unaffected from the event given the $175 Million locked funds with the company. They hold this confidence due to the fact that their exposure is not material, the firm said in a Tweet.
A digital asset lender, BlockFi, said that they have a considerable exposure to the FTX. The surrounding rumors carried a word that the fallen crypto exchange held a majority of company assets, but was eventually denied. Sequoia Capital, a venture capital firm, said that their investment has shrunken from $215 Million to $0.
Crypto(dot)com, a digital asset exchange, said that their $1 Billion assets were successfully recovered. Nexo, a cryptocurrency platform, stated that they had a small loan to Alameda Research and were able to counter a potential loss of over $200 Million. Other companies that became part of this horrendous contagion involve Galaxy Digital, Wintermute, CoinShares and more.
The FTX CEO was charged on counts of conspiracy, money laundering, violation of political campaign financial laws and more. This may lead to a total of 115 years of jail time if SBF is found guilty of all charges. Royal Bahamas Police Force took him under custody on December 12, 2022 on a special request from the United States authorities.
Atlantic reported that Sam will spend his days in Bahamas’ Fox Hill Prison till February 2023. The place is notorious for all the wrong reasons. According to the United States Department of States, the conditions are “harsh” alongside allegations of cases involving physical abuse by wardens.
Source: https://www.thecoinrepublic.com/2022/12/19/ftx-creditors-may-potentially-recover-10-to-40-funds-jeffries/