Ikigai Asset Management sells $65M claim to FTX bankruptcy

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Ikigai, an asset management firm that revealed a large majority of its hedge fund’s assets had been on FTX when it collapsed, said it had sold its claim in the exchange’s bankruptcy proceedings.

In a Dec. 22 post on X (formerly Twitter), Ikigai Chief Investment Officer Travis Kling said the firm sold a $65 million claim to its FTX funds because the price was “much, much higher” than expected. Kling did not say at what price the firm had sold the claim, but reports suggested that some creditors could get up to 73 cents on the dollar — the highest price since FTX’s collapse in November 2022.

“At the end of the day, the decision on whether to sell the claim was mostly a function of opportunity cost – how much do you think the claim price would increase in the future vs taking the cash now and deploying it into something else that can earn a return,” said Kling. “Now that we have received the cash proceeds from the sale of the claim, all of our investors that want to redeem from the fund are able to do so. The large majority of the capital is staying in the fund.”

He added:

“I was (and still am) very interested in FTX 2.0. But the Debtors have fumbled that process so badly, and progress has been so slow, that it didn’t make sense for us to hang around in the claim any longer waiting for something to maybe happen with 2.0.”

More than a year after FTX and many of its subsidiaries filed for bankruptcy, lawyers and brokers continue to call on affected users to sell their claims. The advantage for retail investors means getting back some of their missing funds faster than waiting months or years for potential compensation from the FTX debtors.

Some creditors have said on social media they would prefer to receive funds earlier to invest in crypto rather than miss out on a potential bull run. However, should they choose to cash out, they will likely miss out on a potentially higher payout once FTX’s bankruptcy case wraps.

Among the firms offering cash for FTX claims include Cherokee Acquisition and Open Exchange — the platform backed by Three Arrows Capital co-founders Su Zhu and Kyle Davies. Bankruptcy claims platform Found also reported in June that an FTX creditor pledged a claim as collateral for a loan in the decentralized finance (DeFi) protocol Arcade.

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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