This Firm Offers 8 To 12 Cents On A Dollar Of FTX User Deposit Claims
November 16 2022 - 2:56PM
NEWSBTC
The FTX crisis has escalated into a legal battle between bankrupt
crypto exchanges and firms whose assets are stuck on its platform.
Before FTX froze assets withdrawal, many crypto firms couldn’t
recover their funds from the exchange. As a result, many firms have
announced a potential financial crisis if their funds remain
unrecovered. Several Users are in a panic due to their funds.
However, the latest report revealed that Cherokee Acquisition, a
distressed asset investment firm, has given users options to sell
their credit claims. But the users can only recover a fraction of
their total assets holdings. Related Reading: This Indicator Hints
US Investors Sold Bitcoin Harder Than Others During Crash Cherokee
Acquisition has a marketplace for credit claims against bankrupt
companies like FTX Exchange. The firm placed a guide price on a
dollar of FTX user’s deposit claims above $100,000 in the new price
table released on November 15. The guide price is between 8 to 12
cents on every dollar of the deposit claims. This is an option for
FTX’s creditors who cannot wait till the full resolution of the
bankruptcy proceedings to recover their assets. Low Price indicates
A Low Probability Of Retrieving User Credit Claims When a firm
files for Chapter 11 bankruptcy protection, impatient creditors may
sell their credit claims to distressed asset investment companies
like Cherokee Acquisition. The distressed assets investment funds
place value on the credit claims so that while the creditors can
recover parts of their assets, they too can make a profit after
redeeming the allegations. However, Cherokee Acquisition’s guide
price for the FTX credit claims is relatively low compared to what
other bankrupt companies’ users may get. It suggests an almost zero
probability for users to retrieve their funds. Celsius Network’s
Earn account holders may receive about 20 cents on a dollar after
selling their claims. Voyager Digital’s creditors may also get 40
cents on a dollar for their credit claims. Thomas Braziel, the
managing partner at 507 Capital, a distressed corporate specialist
firm, commented on the meager price tag of FTX’s credit claims.
However, he said the price might be too high for potential buyers.
According to Braziel, no one is buying the FTX credit claims at
that price. Braziel highlighted that the best market price for the
deposit claims to be between 3 and 5 cents. The FTX Crisis, How It
Started, And How It’s Going FTX is a conglomerate of over 130 firms
that filed for bankruptcy on Friday. The FTX issue began after the
firm’s use of customers’ deposits for investing and lending without
their approval came to light. The firm’s balance sheet also found a
deficit of $10 billion. As a result, FTX went bankrupt with funds
from large firms, such as Genesis Trading, Galois Capital, and
Ikigai Asset Management, stuck on its platform. Related Reading:
When will Ripple reach the bottom? XRP price drops to $0.35; these
tokens might be worth more in 2023 Users created improvisatory
Telegram chat groups to sell their stuck deposits one week after
FTX suspended withdrawal. Meanwhile, FTT has declined 10.08% more
in the last 24 hours and is now trading at $1.57. Featured image
from Pixabay, chart from TradingView.com
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