I’m going to show you why FTX creditors will be made whole.
Grab a coffee or something…
Let’s go!
As we all know, SBF is facing seven criminal charges in this current trial, which could result in a maximum sentence of up to 110 years if he is found guilty on all counts. He then faces another 5 charges in March 2024, which could add additional years to his sentence…. It’s not looking good bruv
Here’s currently testifying as speak and its day 3. I’m shocked to be honest but what can he do when everyone else is already waving the white flag. I expect this to end sooner than expected. Given the material that has come to light this year, they all deserve some time.
Moving on, let's discuss the FTX estate's material worth. Some factors to remember which can significantly alter the number
Maximising Venture Portfolio (book value $4.8B)
Priority over Alameda Creditors
Sale of licensed subsidiaries
It’s important to note that FTX users did not agree to lend their funds to Alameda in the first place. The venture portfolio plays a crucial role in filling the gap, and thankfully there are some okay equity, fund, and token investments. Don’t get me wrong, there's a whole range of dog-sh*t investments mixed in there.
Here’s a brief overview
Anthropic is going to fill a large gap or even potentially make us whole, given the fact that SBF invested $500 million worth of customer funds in the company. Recently, Google invested $2 billion in Anthropic. With the recent fundraises, Anthropic’s valuation could be somewhere in the region of $20B–$30B.
FTX’s stake could be worth around $2 billion without being too optimistic. Do they hold or sell OTC now for a discount? Either way, great win for creditors.
Let’s look at the important number, the total amount of assets that have been recouped so far comes to $7.6 billion. I don’t hear a lot of people talk about Alameda’s treasuries, but they equal $358 million.
A breakdown of the liquid crypto assets. The top three largest liquid crypto holdings as of today are:
$SOL $1.25B
$BTC $523M
Stables $370M
In the image below you will see I’ve marked down $FTT to zero and cut the value of the “mixed crypto” by 50%. I made this spreadsheet public, you can find the link at the end of article.
I’d like to touch on the illiquid stuff because some people are being overly optimistic about this part. $MAPS & $OXY are among the largest tokens on the illiquid side, but these can be written off as they turned out to be pretty much scams. There is no value there. Also, token holders do not own MapsMe, there’s a reason why Mastercard cut their deal with them. I was told MapsMe was going to issue 1M cards and charge $10 each. But then charge $100 for Russian users, despite sanctions. This was an attempt to raise even more funds, despite the owner dumping on multiple projects he was involved in.
Luckily, the illiquid stuff doesn’t really matter, as there is significant value throughout the rest of the estate. Plus, the volume on the majority of this stuff is extremely low. Attempting to liquidate these positions would drive down market value. (-99% on most). Most are completely worthless to begin with, especially coins like SOLBTC and SOLETH as they were issued by Alameda/FTX.
There is still no movement on the Bahamian real estate, worth somewhere in the region of $200 million. There is still some potential for clawbacks, although I wouldn’t get my hopes up too much. Some of the most notable historical transactions:
Loans to insiders = $2B
Binance payment from FTX = $2.1B
Political donations = $93M
The most recent settlement with Genesis wasn’t great, the settlement came to $175 million, even though Alameda used $4 billion of customer assets to repay Genesis.
Today's Liquid Value!
Some numbers here are based on my own assumptions, and some stuff may not count from Alameda, it’s a little tricky. So take it as you will. You get an idea of what the number is looking like anyway. Factoring in 2.5 years worth of legal fees at $1.5 million per day (expect it to take longer)
Remember, the venture portfolio affects the number by a huge margin
Priority over other Alameda creditors is important
Sale of licensed subsidiaries
At the low end, the recovery rate thus far is 77%.
Non-Customer Claims
2,300 Claims filed for over $379B
$313B (Duplicates Removed)
= $65B in Non-Customer Claims
Customer Claims
AcrossFTX.com& FTX US, debtors have scheduled $10.9B in customer claims.
36,075 customers filed for over $16B
$7.9B (72%) Have yet to agree
$1.9B (18%) Have disputed
$1.2B (10%) Have agreed
The proof-of-claims (POC) final submission date was September 29, 2023. The process of resolving contested claims has already begun.
You have certain people trying to claim the full amount for the illiquid stuff. Mark-to-market value isn’t justified for valuing illiquid tokens. The liquidity approach needs to be taken on these assets. A prime example is a chap called Alex Grebnev, founder of two samcoins. He raised $90 million between Oxygen and MapsMe, then delivered NOTHING. Yet he’s trying to claim the illiquid sh*t and what else was left in the Treasury for a grand total of $421 million. To my knowledge, he is currently being investigated. Dude deserves a zero on his claims.
I made a twitter thread about his claims early on this year, and asked some of the largest investors of Oxygen like @KyleSamani from @multicoincap and @cmsholdings for their perspectives.
FTX account claims are now trading at $0.55c as of this month (Oct 23). Although I should note that smaller claims trade a lot lower. Regardless, claims have multiplied this year, and for good reason. Creditors are going to be made whole. Don’t be selling yours cheap. There’s a certain someone on X who has been rinsing creditors.
There is always the possibility of a reboot, which has finally been taken seriously by the bankruptcy team. Given the fact that there have been three official bids to purchase the exchange, which was narrowed down from 75 offers. We’ll know more about this in December. FTX 2.0 would fill the gap. Every creditor would be turned into an equity holder.
However, because there is significant cash on the table, leeches will likely drag this out as long as they possible can. It will take years for creditors to be paid out, but at least there is value.
The opportunity cost of having our hands tied as creditors has been huge. I know this has affected so many people, and I hope the judge doesn’t forget this. It’s turned my life upside down.
But we will run it back turbo no doubt about it. After all, it’s the love of the game that keeps me going.
If anyone is still feeling groggy about it, reach out to me on twitter @Batsyy_. I'm always here to chat.
I'm definitely going to be missing a bunch of stuff. Don’t shoot the messenger, so let me know and I will add.
P.S. There has been a huge uptick in scam and phishing emails being sent to FTX creditors due to the Kroll data leak. Please be hyper-aware!
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