FTX Cashes Out of Anthropic, Rakes in $800M Profit

• FTX has marked a complete exit from Anthropic. 
• The exchange bagged nearly $800 million in profit. 
• FTX’s bankruptcy costs will likely swallow the proceeds. 

FTX is leaving no stone unturned as it prepares to wrap up its chaotic chapter with a happy ending. Over the past year, the exchange’s bankruptcy estate has been on a liquidation spree, offloading everything in its portfolio from luxurious Bahamian real estate to stakes in high-flying unicorns like Anthropic. 

In a major win for FTX’s creditors, the exchange is one step closer to fully reimbursing its claimants as it cashes out one of its most valuable assets yet. 

FTX Exits Anthropic

In a Friday update, FTX bankruptcy estate announced dumping its remaining shares in Anthropic, an AI startup that closely rivals OpenAI. This marks a complete exit from the company after receiving court approval in early February .

According to the firm’s latest bankruptcy filings , FTX sold 15 million shares for $30 apiece, netting $450 million in proceeds. This follows their previous sale in March, where they sold the bulk of their Anthropic shares at the same price, earning the company nearly $1 billion. 

The sale netted the exchange nearly $800 million in total profit from its initial $500 million investment. Reports showed that FTX’s former CEO, Sam Bankman-Fried, had funneled customer deposits into Anthropic between October 2021 and April 2022, just months before his empire crumbled in November 2022.

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Global venture capital fund G Squared led the charge among buyers, snapping up about 4.5 million shares for $135 million. A cadre of venture capital funds scooped up the rest of the shares.

FTX bankruptcy claimed in its appeal that the proceeds would be directed towards the ongoing repayment process for its extensive list of creditors, which has recently picked up steam. However, a significant portion of the funds will likely be swallowed by the exchange’s skyrocketing bankruptcy costs.

FTX’s Bankruptcy Costs Cross $700M

According to the latest filings from the bankruptcy estate, FTX has racked up a staggering $700 million in legal and administrative fees, as tracked by bankruptcy expert Mr. Purple . 

Consulting firm Alvarez Marsal held the lion’s share of these expenses, billing the estate a whopping $212 million for its services. Sullivan and Cromwell, FTX’s legal counsel, invoiced the second-largest for $202 million. 

Mr. Purple’s tracker also showed that since the start of the case, FTX CEO John Ray had billed the estate $5.6 million, according to his hourly rate of $1,300. The Anthropic exit could go a long way amid the exchange’s soaring bankruptcy costs and bolster its pledge to repay its customers in full. 

FTX Looks to Pay Customers in Full Plus Some More

FTX’s bankruptcy exchange has found billions of dollars more than required to cover the losses users incurred during the SBF-led fiasco in November 2022. Surprisingly, the exchange is set to fully reimburse users plus interest—a rare sight in US bankruptcy proceedings. 

With as much as $16.3 billion in cash at its disposal for distribution, 50% more than it owes, FTX appears well-equipped to settle its debts, totaling around $11 billion to two million customers and other creditors.

The exchange’s bankruptcy estate is now confident in reimbursing 98% of its creditors for 118% in claims– in cash. 

FTX’s CEO, John Ray III, shared that creditors with allowed claims below $50,000 will be eligible for the 118% compensation pending court approval, as outlined in the plan. According to a recent court filing, FTX’s proposal is slated to distribute the claims within 60 days of court approval.

On the Flipside

• FTX will value claimants’ digital assets in cash at November 2022 rates. This means the exchange will pay users $16,000 for 1 Bitcoin instead of the $68,000. 
• FTX also liquidated its entire stash of locked Solana tokens in May. 
• FTX creditors have filed a lawsuit against their legal counsel, Sullivan Cromwell, accusing them of actively participating in the “FTX Group’s multibillion-dollar fraud” and claiming that the firm significantly profited from the exchange’s fraudulent activities.

Why This Matters

FTX’s exit from Anthropic is a major development for the exchange’s claimants, signaling a full recovery is on the horizon.

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