Original author: Benson Sun, former FTX Taiwan community partner (Twitter:@BensonTWN）
When helping people submit claims these days, I often get asked a question: Will FTX lose money? How much will you lose if you lose money?
The most objective way is to look at the price of debt in the secondary market.
The purchase price of FTX debt (net deposit) on the Claim market has risen to about 35%, and is showing a gradual upward trend every month.
I asked a claim buyer how they price debt, and the other party said that in the case of FTX, their expected return is to double within 5 years. In other words, the current consensus among claim buyers is that the five-year recovery rate will reach more than 70%, and then they will buy the debt at a price of 35%.
PS: Note that this refers to the net deposit account. The prices for other accounts will be different, and the details will be expanded later.
FTX has now recovered assets worth a total of US$7 billion. Compared with the scale of debt of US$12 billion, the recovery ratio is approximately between 60% and 70%, which is consistent with this figure. Of course, debt buyers in the secondary market also make bids based on market conditions, and these conditions will change over time.
Factors that change include:
1. Can FTX get more clawbacks from executives, donors, and politicians?
2. Has there been any change in the scale of the claim (for example, a blacklist is unable to submit a claim due to identity reasons, thereby reducing the scale of the claim, or a government fine suddenly pops up to increase the scale of the claim)
3. How long will John Ray’s proposed restructuring plan take?
4. How high is the FTX bidder’s offer?
5. Price for asset liquidation
It should also be noted that the status of the claim itself will also affect the final amount/sequence of the claim, so this is also reflected in the secondary market price of the claim.
Changing factors include:
1. Are there any locked tokens (such as locked FTT, locked SRM, etc.)
2. In the 90 days before 2022/11/11, the account is net deposited (net deposit) or net withdrawn (net withdrawn)
3. Do you have funds to earn in FTX (the account with 5-8%)
4. Are there any lent assets?
So we can see that the FTX trading claims in the picture below are divided into three categories:
The purchase prices from high to low are:
Net deposit: Net deposit within 90 days, no clawback risk
Minimum net withdrawal: Net withdrawal within 90 days, with the risk of clawback
Larger preference risk: There are other factors that may affect the order of claims
You can log in to FTX to check the deposit and withdrawal records. Confirm the total cash flow for the 90 days before 2022/11/11, whether it is a net deposit or a net withdrawal. If it is the former, the clawback risk will be relatively low, and subsequent claims may be more complete. Because John Ray hasnt said how to clawback the account that has been withdrawn from the net, he just put forward an idea first.
Since there are too many FTX users, the difficulty of clawback for retail investors will be very high, so in the end it may not have any impact on retail investors at all, but the purchase price in the debt market will first reflect this information. I hope the above has answered everyone’s questions.
Lets talk about something off topic
I know that everyone is betting that John Rays team has been sucking blood, and some of the big creditors are also very unhappy. Currently, these big brothers and I are preparing some things to speed up the progress of the reorganization plan. (The good news is that FTX buyers are real and not smoke and mirrors.)
If there is more information, it will be announced to everyone.
