The FTX bankruptcy case has sparked a battle for creditor claims, leaving investors with difficult choices.

With the cryptocurrency exchange giant FTX filing for bankruptcy protection, approximately 1 million creditors are caught in a long wait. It is reported that FTX owes the top 50 creditors a total of $3.1 billion. Faced with a bankruptcy process that could last for years, some investors are beginning to seek ways to exit quickly.

Several well-known investment firms are in talks to acquire these debt securities. The small investment firm 507 Capital has purchased several debt securities from some hedge funds. However, opting to sell the debt securities may mean receiving an amount less than what would be distributed after waiting for the bankruptcy proceedings to be completed.

Currently, the selling price of the debt instruments is only a few percent of face value, meaning that investors will incur significant losses. Debt acquirers will need to patiently wait and strive for more returns through the bankruptcy process. Thomas Braziel, the founder of 507 Capital, stated that many people are interested in these debt instruments but lack understanding of their complexities.

Braziel has extensive experience in handling complex cryptocurrency asset claims and has participated in the acquisition of claims against collapsed digital asset companies like Mt. Gox. He warns investors that such transactions require immense patience, as the Mt. Gox case took eight years to resolve.

FTX's high liquidity has attracted numerous institutional investors, including crypto hedge funds. Some fund companies are now looking to exit as soon as possible to avoid lengthy legal proceedings. Some FTX clients plan to complete debt sales by the end of the year to allow for loss write-offs during tax reporting.

Braziel revealed that he acquired several FTX claims at face value prices of 5-6%, with amounts ranging from 2 million to 8 million dollars. He is currently negotiating a claim of approximately 100 million dollars with a Singapore fund manager, while also in talks with a German fund regarding a 23 million dollar claim. The asking prices from these funds are typically close to 10% of face value.

Assessing the future value of bankruptcy claims is more of an art than a science. Braziel believes that a rough calculation can provide a general understanding of available assets and liabilities, but obtaining significant returns depends on legal arguments. He predicts that U.S. courts may recognize client assets held in trust based on English trust law, which would grant his clients priority in repayment.

Additionally, some of FTX's debts are not related to customer assets. There are rumors that a certain employment contract includes a clause guaranteeing the payment of salary for the following 9 years, with an annual salary of up to $525,000, and a guaranteed minimum annual raise of 15%. However, some believe that U.S. courts are unlikely to enforce such clauses, and unpaid wages may have little to no value in bankruptcy claims.

As the FTX bankruptcy case progresses, investors face the difficult decision of whether to sell their claims. Whether to sell immediately or wait patiently requires careful consideration of potential risks and rewards.