The FTX Trade Tempts Oaktree and Baupost

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It will be months, if not years, before FTX’s customers know how much they will get back from the failed crypto exchange. As of now, Oaktree and Baupost are reportedly interested in evaluating a potential investment in the firm.

During this evaluation period, Oaktree and Baupost will consider the financial health of FTX to determine if an investment is worthwhile.

FTX is undergoing a period of restructuring following its failure to pay back customers who lost money after investing in cryptocurrency products marketed by the exchange. FTX has since suspended trading on its platform and is in talks with creditors to develop a payback plan for those affected.

Experts believe that any deal struck between Oaktree and Baupost, and FTX would likely result in substantial losses for investors.

The calculus behind ultimate bets is tricky and subject to numerous contingencies, such as market conditions and economic developments. FTX’s investors must consider the firm’s current financial position and assess the likelihood of a successful restructuring plan that would be acceptable to creditors.

FTX cleanup, led by one-time Enron liquidator John J. Ray III, has been tallying up the liabilities owed by the primary units of Sam Bankman-Fried’s crypto empire and recently concluded that those entities owe $US7.9 billion in total. The figure was arrived at after a comprehensive assessment of FTX’s liabilities, including unpaid customer deposits, loans to its affiliates, and other associated debts.

A lawyer representing FTX’s estate recently informed a judge that “A significant portion of the firm’s assets have gone missing or been stolen.”

In addition to unpaid customer deposits, loans to affiliates and other debts, the lawyer revealed that many of FTX’s assets were unaccounted for.

This has led to additional investor losses due to the firm’s insolvency and restructuring woes. Furthermore, it has cast doubt on FTX’s ability to restructure its debt and pay back any creditors.

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