FTX's bankruptcy case has soared since bankruptcy filing

FTX's bankruptcy case has soared since bankruptcy filing

The FTX crypto exchange's demonetization has been characterized as one of the most embarrassing events in U.S. history. Legal fees on the case have topped $200 million. Sam Bankman-Fried's criminal trial is expected to begin next week.

Matrixport, a crypto service provider that monitors the market, said the expected compensation of creditor claimants against FTX has surged to an average of 37 cents on the dollar, the highest since the bankruptcy filing in late 2022 and up from just over 10 cents at the start of 2023.

Creditors who choose not to wait until the resolution of proceedings to get back their credit claims can dispose of their credit claims to speculators focused on distressed assets. The price of these claims serves as a proxy for the expected recovery for victims.

As it looks now, the expected salary represents a remarkable improvement since the aftermath of FTX's bankruptcy filing. Last November, creditors offered their claims at less than a few cents on the dollar and almost no one was buying them, CoinDesk reported.

FTX said earlier this month that under John Ray III's leadership, the veteran Wall Street bankruptcy lawyer who shepherds the exchange through the bankruptcy process, it had managed to marshal $7.3 billion of assets, including $3.4 billion in crypto and $200 million worth of real estate on the Bahamas.

There could be some additional clawbacks that could improve creditor compensation, Matrixport said, such as a $2.1 billion claim against once-rival crypto exchange Binance and another $700 million claim from investment firm K5, related to Michael Kives, a former aide for Bill and Hillary Clinton.

The company also holds a highly-coveted $500 million stake in artificial intelligence startup Anthropic, which the exchange acquired from customers to take over so creditors have a claim on it. FTX considered the sale of the stake, but decided to halt the process in June. This may turn out to be a savvy move, as tech giant Amazon said earlier this year it plans to invest up to $4 billion in the startup. Amazon's investment 'could lift the value of FTX creditor claims,' Matrixport said.