February 3, 2023

FTX Creditors Could Recover up to 40% of Their Funds, Says Jefferies (Report)

How Wide Does FTX Contagion Spread? The Affected Companies So Far

The global investment banking firm – Jefferies Group – reportedly determined FTX creditors could retrieve as much as 40% of their lost money.

  • In an interview for The Block, Joseph Femenia – Global Head of Distressed Debt Trading at Jefferies – said there’s light in the tunnel for FTX creditors who could recover between 20% and 40% of their assets. 
  • The executive, who has formed a five-person team to work on issues related to the bankrupt exchange, explained that rates could change once there is new data about the balance sheet of FTX.
  • Femenia estimated that FTX owes between $10 billion and $13 billion to creditors. He outlined that between 5% and 10% of that amount needs to be paid to attorneys and relevant administrators so they can process the clients’ cases.
  • The executive reminded that victims of the multi-billion Madoff Ponzi scheme recovered over $14 billion but paid over $1.5 billion for administration fees (around 10% of the total sum).
  • Described by US prosecutors as “one of the biggest financial frauds in American history,” FTX caused a significant market decline and left numerous investors empty-handed.
  • According to court documents, the former crypto giant owes its top 50 creditors over $3 billion. Some of the prominent names with exposure to the bankrupt platform are Temasek, Tiger Capital, BlackRock, Thoma Bravo, Sequoia Capital, and more.

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