The recent bankruptcies of cryptocurrency companies FTX, Celsius Network LLC, and Voyager Digital Ltd have left hundreds of customers with accounts stuck and unable to access their funds. To avoid the complexities of the bankruptcy proceedings, some customers have opted to sell their cryptocurrency claims at deep discounts.
The buyers of these claims are primarily hedge funds and distressed-debt investors, who are expecting to benefit from the potential upside of the tokens. Depending on the seller and the buyer, claims can be sold for 16.5 cents on the dollar or with a payment plan of 5% upfront and 20% of future proceeds.
Online market Cherokee Acquisition, a bankruptcy claims broker and buyer, and Xclaim Inc., a bankruptcy claims trading startup, have facilitated the sale of over $91 million in FTX customer claims. The sales are a way for some customers to get some money back quickly, lower tax liability, and close an unfortunate chapter in their lives.
Dylan Jones, who sold his $165,205 Celsius claim, said he has some regrets but is still grateful to have learned his lesson without losing too much money. His experience is a reminder of the risks involved with investing in cryptocurrency.