FTX

Background

In November 2022, FTX — once one of the world’s largest cryptocurrency exchanges — filed for bankruptcy, freezing billions of dollars of customer and creditor funds. Recovery through the formal estate process was expected to take years, leaving claimants without access to their capital.

For many creditors, the FTX collapse was not just a paper loss. Businesses had operating capital trapped on the platform, individuals had savings frozen, and funds had positions they could no longer manage. The bankruptcy process, while ultimately productive, offered no certainty on timing or final recovery in its early stages.

Our role

VL Capital Management stepped in to provide immediate liquidity to creditors holding claims against the FTX estate. By acquiring claims at a fair, transparent valuation, we enabled claimants to realize value up front rather than waiting through a prolonged legal process.

Our underwriting team modelled the estate’s recoverable assets, the priority of each claim, and the likely distribution timeline. That analysis allowed us to make firm, no-obligation offers — and to close quickly once a claimant chose to proceed. Throughout, claimants kept full control: there was no cost to request a quote and no pressure to accept.

Outcome

• Creditors received an upfront cash recovery option
• Reduced exposure to the uncertainty and timeline of the bankruptcy
• A streamlined, confidential claims-transfer process
• Capital freed to be redeployed instead of sitting locked in the estate

For claimants who valued certainty over the possibility of a higher — but later and unguaranteed — recovery, selling their claim turned a frozen position into working capital they could use immediately.