Ikigai Sells $65M Claim in FTX Bankruptcy Proceedings, Fetches Higher Than Expected Price
Summary:
Ikigai, a wealth management firm, has sold its $65 million claim in FTX's bankruptcy proceedings for a price significantly higher than anticipated. This decision allows Ikigai's investors to redeem their investments when desired. Retail investors are also urged to sell their claims for a quicker, albeit potentially lesser, compensation than waiting for the bankruptcy case conclusion. Cherokee Acquisition, Open Exchange and Found are currently accepting claims from affected FTX investors.
Ikigai, a wealth management organization that held a sizable portion of its hedge fund assets in FTX at the time of its collapse, has announced the sale of its claim in the cryptocurrency exchange's bankruptcy action. This move, announced by Ikigai Chief Investment Officer Travis Kling via a social media post on Dec. 22, was prompted by the 'much higher than anticipated' sale price of its $65 million claim on FTX funds. While the precise amount for which the claim was sold remains undisclosed, estimates suggest that some claimants might recover as much as 73 cents for each dollar — the highest potential return since FTX collapsed in November 2022.
Kling explains that the decision to sell was largely based on considerations of opportunity cost, pondering the potential future increase in the claim price against the immediate liquidity it offered, allowing capital to be readily deployed elsewhere to generate returns. He says, "We have now received cash proceeds from the claim's sale, which means all our investors wanting to redeem from the fund can now do so." Despite this, he emphasizes that the bulk of the capital will remain in the fund.
A year after the declaration of bankruptcy by FTX and numerous subsidiaries, affected customers are still being urged by legal experts and brokers to divest their claims. This allows retail investors to speedily reclaim a portion of their losses rather than enduring a long wait for potential compensation from FTX. Some claimants have voiced their preference on social platforms for receiving funds upfront to reinvest in cryptocurrencies, amid slight fears of missing out on an emerging bull market. Yet opting to cash out early might mean forfeiting a potentially higher payout once FTX’s bankruptcy case concludes.
Among those offering to purchase FTX claims are Cherokee Acquisition and Open Exchange, a platform supported by the co-founders of Three Arrows Capital, Su Zhu and Kyle Davies. Furthermore, Found, a bankruptcy claims platform, reported that an FTX claimant had offered up his claim as loan collateral via the decentralized finance (DeFi) protocol known as Arcade in June.
Published At
12/23/2023 1:02:56 AM
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