FTX Liquidates Last of Anthropic Shares for $450M Amid Ongoing Bankruptcy

• The ongoing legal proceedings involving FTX founder Sam Bankman-Fried are nearing a conclusion, while FTX’s bankruptcy continues to unfold.
• Recent filings reveal significant developments in the company’s financial restructuring process.
• One key update involves the sale of FTX’s remaining shares in the AI startup Anthropic, which generated substantial revenue.

Discover how FTX’s strategic asset liquidation and legal challenges are shaping its financial recovery amidst bankruptcy proceedings.

FTX’s Strategic Asset Liquidation

In a bid to recover funds, FTX has sold its remaining 15 million shares in Anthropic, an AI company known for developing the chatbot Claude. The sale, executed at approximately $30 per share, resulted in over $450 million in proceeds. This move adds to the $1.3 billion total gain from FTX’s initial $500 million investment in the startup, marking a significant profit margin of $800 million.

Impact of the Sale on Investors

The largest participant in this transaction was the global venture capital firm G Squared, which acquired around one-third of the available shares for $135 million. Other buyers included a consortium of venture capital funds, reflecting strong investor confidence in Anthropic’s future prospects. This second tranche of shares was sold at the same price achieved during the first sale in March, indicating consistent market valuation.

Legal and Administrative Costs Surge

The cost of managing FTX’s bankruptcy process has now exceeded $500 million due to legal and administrative expenses. Creditors have raised concerns about potential conflicts of interest, as Sullivan & Cromwell, the primary law firm overseeing the bankruptcy, also represented FTX prior to its collapse. These allegations led to the appointment of an independent examiner to ensure transparency and accountability in the proceedings.

Exorbitant Legal Fees Under Scrutiny

Analyses, such as the one conducted by The New York Times last year, highlight the immense fees charged by law firms handling cryptocurrency bankruptcies. FTX’s CEO, John Ray, has billed $5.6 million at his hourly rate of $1,300 since taking charge of the bankruptcy case. Despite these costs, FTX plans to repay at least 118% of the approved claims, based on their dollar value at the time of the exchange’s bankruptcy filing, to 98% of its creditors.

Overall, these developments signify significant progress in FTX’s efforts to manage its financial woes and address creditor concerns effectively.

Conclusion

While FTX’s proactive asset liquidation demonstrates a strategic approach to generate liquidity, the high legal fees and potential conflicts of interest underline the complexities involved in navigating bankruptcy proceedings. As the company strives to resolve its financial challenges, stakeholders are advised to stay informed and conduct their own research before making investment or trading decisions.