FTX seeks to liquidate 8% stake in Anthropic holdings

Amidst the intricate landscape of its bankruptcy proceedings, FTX, the beleaguered cryptocurrency exchange, is making strategic maneuvers to alleviate its financial burdens. The latest development involves FTX seeking approval to offload its substantial 8% stake in Anthropic Holdings, an artificial intelligence startup. Spearheaded by FTX’s current CEO, John Ray III, the motion outlines a comprehensive plan, proposing not only the sale of the stake but also presenting two potential avenues for the sale process: an auction or a private sale.

Recognizing the urgency of its financial predicament, FTX is pushing for an accelerated review, advocating for a shortened objection period, and targeting a court hearing on February 22. The deliberate omission of the precise price sought for Anthropic shares reflects FTX’s strategic approach, with its legal team asserting that public disclosure could potentially jeopardize the chances of securing higher offers. Anthropic Holdings, having attained an estimated valuation of up to $18 billion in December 2023, suggests that FTX’s 7.84% stake may hold a significant value, approximately $1.4 billion.

This development has ignited hope among those impacted by the FTX collapse, as the cryptocurrency exchange envisions generating ample funds to meet its commitment of fully repaying all customer and creditor claims. The proposed sale of the Anthropic Holdings stake emerges as a critical opportunity for FTX to address its financial obligations systematically while maximizing returns for its stakeholders.

In tandem with this effort, FTX has initiated legal proceedings in a Delaware court to liquidate its $175 million claim against the bankrupt digital financial services firm, Genesis Global Capital. The claim, initially advanced by Alameda Research, FTX’s affiliated hedge fund, is positioned to be sold in its entirety or in parts, depending on prevailing market conditions. Notably, claims against Genesis are currently fetching 65% of their face value, a significant premium compared to the reported 38% by Alameda Research. FTX’s strategic move aims to capitalize on these favorable market conditions through an approved sales procedure.

The genesis of FTX’s financial challenges lies in irregularities uncovered in its accounting books, leading to its collapse in November 2022. During this tumultuous period, Genesis found itself entangled with FTX, with $175 million tied up in FTX accounts, though it contended that this did not adversely impact its market-making activities. Subsequently, in January 2023, Genesis, a subsidiary of the Digital Currency Group, filed for bankruptcy, sparking a contentious dispute with the Gemini cryptocurrency exchange over the Gemini Earn program.

In a parallel narrative, Genesis recently reached a notable $21 million settlement with the United States Securities and Exchange Commission concerning the Gemini Earn program. This settlement is poised for consideration during a court hearing in New York on February 14, where the proposed bankruptcy reorganization plan for Genesis debtors will also undergo a thorough examination. As these multifaceted developments unfold, FTX remains at the forefront of strategic decisions, navigating the intricate paths of financial recovery and regulatory resolutions.