Non-Performing Asset Fund Buys FTX Bankruptcy Claim Rights in Private OTC Market

02/21/2023 00:39 • AI & Tech Insights • 137 views

According to the report, according to the source, the non-performing asset fund bought the bankruptcy claim right of FTX at a maximum face value of 20% in the private over-the-counter (OTC) market. FTX currently owes $3.1 billion to the 50 largest creditors. The valuation of FTX’s non-performing assets in the bankruptcy trading market is about 16% of the face value of the claim, and the individual claims being sold on the bankruptcy market XClaim are as high as $27 million. （CoinDesk）

The non-performing asset fund is purchasing FTX non-performing assets at a maximum face value of 20%

Interpretation of the news:

The recent report reveals that a non-performing asset fund has purchased the bankruptcy claim right of FTX in a private over-the-counter (OTC) market at a maximum face value of 20%. FTX owes a debt of $3.1 billion to its top 50 creditors, and the value of its non-performing assets in the bankruptcy trading market is about 16% of the face value of their claim. Moreover, the individual claims being sold on the bankruptcy market XClaim are as high as $27 million.

This message indicates that FTX is facing bankruptcy because of its inability to pay debts to its top creditors. Under such circumstances, FTX’s non-performing assets have become available in the bankruptcy trading market, and the value of its bankruptcy claims is much lower than their face value. Therefore, a non-performing asset fund has bought FTX’s bankruptcy claim at a maximum value of 20% to make a profitable investment.

The buying and selling of claims in the bankruptcy market is a common practice in the financial system, especially for non-performing assets. By purchasing FTX’s bankruptcy claim, the non-performing asset fund can obtain the debt owed by FTX at a discount, which can be resold later at a higher price. The private over-the-counter (OTC) market is where buyers and sellers can negotiate to sell these claims.

The bankruptcy market XClaim has become popular in recent years, with individual claims being sold as high as $27 million, proving that the potential returns on a bankruptcy claim are significant. However, the value of FTX’s non-performing assets is only about 16% of the face value of their claims, indicating a poor financial status for the company.

In conclusion, the purchase of FTX’s bankruptcy claim by a non-performing asset fund reveals the financial difficulties faced by FTX, and the value of its non-performing assets in the bankruptcy trading market is not as high as expected. The non-performing asset fund hopes to make a profitable investment by buying FTX’s bankruptcy claim at a lower price than its face value in a private over-the-counter (OTC) market.

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