Claim acquisition company response: How is the value and transfer of FTX debt evaluated?

117 Partners is a company specializing in bankruptcy claim acquisitions, restructuring consulting, and brokerage services, making significant strides in the field of cryptocurrency bankruptcy debt acquisitions. The company is led by CEO Thomas Braziel, a graduate of New York University with degrees in Mathematics and Economics, as well as a Master's degree in Financial Mathematics from Columbia University. Braziel is a highly experienced professional in this field and has acquired nearly 4,000 bitcoins from Mt. Gox customers, yielding substantial profits.

In an online interview with Taiwanese cryptocurrency personality Benson Sun, 117 Partners explained their evaluation process for acquiring debts, which can serve as a reference for FTX creditors. Source

How to Evaluate the FTX Debt Value?

117 Partners will evaluate claims based on the market value of assets such as Bitcoin on the day of FTX's bankruptcy filing, using a method consistent with the FTX bankruptcy management team.

The valuation of claims is influenced by factors such as the scale of claims, recovery risks (especially for accounts with net withdrawals within 90 days before bankruptcy), and the "cleanliness" of accounts, including factors such as holding Sam tokens or unresolved contracts. Note: A series of FTX ecosystem currencies related to SBF investment.

What is Recovery Risk?

The preference risk depends on whether the creditor's account has clawback risks to recover assets, that is, whether the account had net withdrawals within 90 days before bankruptcy. If the net withdrawal amount exceeds $250,000, it will affect the value of the claim.

FTX will recover user funds? The reorganization team targets those who withdrew funds before bankruptcy, impacting tens of thousands of users.

FTX Accelerated Compensation Plan Explained: How to Address the $9 Billion Compensation Fund Shortage?

What is the Cleanliness of an Account?

• If the account has Sam tokens (such as FTT/SRM), this part will be calculated at a very low valuation (<5%).
• If the account has a large number of open contracts, it will increase the complexity of valuation and lower the acquisition price.
• Money in FTX earn or locked tokens does not affect the quote, it is a 1:1 calculation.

Time and Payment Methods Required for the Transfer of Claims by 117 Partners

The claim transfer process with 117 Partners is efficient, usually taking about a week. It includes the signing of a Letter of Intent (LOI) and subsequent due diligence (DD) phase. For claims valued at less than $1 million, stablecoins can be used for payment, while bank transfers can be used for larger claims.

Small Creditors Can Also Sell Claims

117 Partners also purchase smaller claims, with the smallest claim they have handled slightly over $10,000. However, smaller claims are purchased at a lower price, around 70% of the value of larger claims.

Advantages of Selling FTX Debt

According to Benson Sun's interview, in a competitive debt buying market, 117 Partners' advantage lies in the speed and flexibility of their payment methods. The company can complete due diligence and payment within 5-7 working days, faster than other market participants.

Who Buys These FTX Debts?

Buyers are mostly family offices or private funds, aiming for a 15%-20% internal rate of return (IRR) within 3-4 years. Sellers may be driven by various factors, including the need for liquidity or confidence in surpassing IRR investment returns.

In a market full of uncertainties, working with buyers like 117 Partners can help avoid fraud in the over-the-counter (OTC) market. The company encourages sellers to assess the professionalism of buyers and be cautious of overly aggressive or suspicious quotes.

For those interested in selling claims to 117 Partners, the company provides a contact form, emphasizing the importance of conducting professional and secure transactions in this complex and evolving market.