Stanley Choi, Blockmedia Reporter Thomas Braziel, the founder of 507 Capital, a distressed asset investment firm that purchased $13 million of FTX debt last November for 5-6% of face value, recently announced that the firm would be able to reduce the amount of FTX debt within the next 15 years. On the 8th, Block Tempo reported that it expected 60% to 100% recovery.
The cryptocurrency exchange FTX went bankrupt in November of last year and is currently under bankruptcy protection and restructuring. The total debt of affiliates such as FTX and Alameda is estimated to be more than $10 billion, with more than 100,000 creditors.
FTX owed a whopping $3.1 billion to its top 50 creditors, and the earnings of these FTX victims drew the attention of distressed asset investors.
Last November, Thomas Braziel, the founder of 507 Capital, a distressed-asset investment firm, purchased several FTX bonds from hedge funds hoping for quick liquidation at 5-6% of face value. The face amounts are $2 million, $3 million, and $8 million, for a total face amount of $13 million.
The redemption schedule was far off, but Braziel tweeted an article predicting the FTX redemption schedule on December 31 last year, saying, “FTX Crazy Prediction – Redemption schedule: 0-2 year record complete, 2-7 year litigation and bond sale, 7- 15 years venture portfolio sale. Asset recovery of 60-100% or more over 15 years.”
“In US dollars, the recovery rate can range from 60% to 100%,” Braziel added. When asked if he deducted $200 million in FTX bankruptcy litigation costs, he replied that the costs were expected to be between $500 million and $700 million.
He has extensive experience acquiring non-performing cryptocurrency loans. He paid $100 for 4,000 bitcoin claims from the bankrupt exchange Mt. Gox in 2017, and as Mt. Gox’s buyback process began last year, he is expected to recover 18x his investment.
Previously, Messari analyst Kunal Goel examined FTX’s balance sheet and predicted that FTX investors could recover 40-50% of their assets, while Wall Street investment bank Jefferies predicted that FTX creditors could recover 40-50% of their assets (investments) It predicted that 40% of assets (including institutions and users) could be recovered, but the rate of fund recovery could be reduced if the bankruptcy trustee charged high management fees.
