FINANCE

Investment bank Jefferies and other Wall Street companies bid low for FTX debt, investors may recover some funds faster

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Investment bank Jefferies and other Wall Street companies bid low for FTX debt, investors may recover some funds faster

According to The Wall Street Journal, sources revealed that investment bank Jefferies, brokerage firm Seaport Global, and BTIG, among other Wall Street companies, are evaluating the potential value of FTX's distressed assets, which could potentially allow investors to recover some funds more quickly.

Why is Wall Street Interested?

The Wall Street Journal reported that due to the complexity of the bankruptcy process, it may take FTX users several years to recover their funds, and even then, it is likely to be only a small portion of their deposits. These companies are competing with each other to buy users' asset claims at a discount, ultimately profiting when some funds are actually delivered.

This is a common activity in bankruptcy proceedings, where claims are transferred to professional companies willing to litigate for profit, allowing investors to recover some funds more quickly.

Low-Bid Auctions

The Wall Street Journal reported that due to the uncertainty of the bankruptcy process, it is even uncertain whether FTX's funds can be obtained. Currently, a claim worth $1 is only valued at a few cents or even one cent = 0.01 dollars.

Investment banks such as Jefferies, brokers like Seaport Global, and BTIG have not responded to this issue.

In an online claims market, traders have offered to purchase claims at a price of 6 cents on the dollar and sell them at a price of 10 cents on the dollar.