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- Big players in distressed investing are eyeing FTX customers whose assets are stuck on the bankrupt crypto exchange, Bloomberg reports.
- Names like Baupost Group and Oaktree Capital are among those that have expressed interest in buying their claims.
- Talks over accounts holding over $100 million are heating up, per the report.
Big players in distressed investing are eyeing the claims of FTX customers whose assets are stuck on the bankrupt crypto exchange, sources told Bloomberg.
Top names like Baupost Group and Oaktree Capital Management are among those that have expressed interest, according to the report, potentially setting up risky bets that they will eventually get paid in bankruptcy proceedings.
Meanwhile, other Wall Street players like Citigroup and Cowen are vying for a chance to play middleman here, the report added.
Valuations have hovered between 5 and 13 cents on the dollar, and customers must decide whether to get limited cash now or hold out for something better in the future, which isn’t a sure thing.
Any investors face a great deal of uncertainty with FTX. The company’s new management, led by John Ray III, has found over $1 billion in assets and $1.2 billion in cash versus liabilities of roughly $10 billion. Just how much of those funds will go to creditors and customers remains to be seen.
More and more investors are inquiring about accounts holding over $100 million, per the Bloomberg report. The largest 50 creditors have a face value of at least $20 million, and countless other customers lost access to assets on the exchange.
Since Sam Bankman-Fried stepped down as CEO and the exchange filed for bankruptcy in November, Ray has said that FTX had haphazard bookkeeping and suspect financial records, and that it’s impossible to recoup all customer losses.
Several FTX customers who lost access to funds on the platform shared plans with Insider to pivot away from crypto and put cash into stocks in the future, and that they don’t have much hope in the company making them whole.
