Ouroboros, the bankrupt crypto investor, focuses on smaller claims.
The boutique investment firm Arceau has developed a platform to automate the process of verifying cryptocurrency bankruptcy claims in firms like FTX or Celsius. This allows the firm to buy out smaller creditors who have found it difficult to access traditional bankruptcy markets. Last year, a number of large crypto firms collapsed, making thousands of investors unwitting creditors, whose assets are now stuck in never-ending bankruptcy processes.
One option available to those whose assets are locked up in a bankruptcy estate is to sell their claims at a discount on marketplaces such as X Claims or Claims Market. However, there are very few providers of liquidity for relatively small claims of around $50,000 due to the cost of due diligence, according to Ouroboros co-founder Louis d’Origny.
“We’ve created a software tool that automates the process of proving you have an FTX claim,” d’Origny said in an interview. “It’s a lot of work for a fund to prove that you have a claim in the FTX case, and most funds will not buy a claim that’s under $2 million.” This limit makes it almost impossible for small creditors to sell their claims.
Joining d’Origny and other Arceau co-founder Michael Bottjer on Ouroboros is crypto bankruptcy investor Thomas Braziel, a partner at 507 Capital.
“Ouroboros is going after smallish claims and making liquidity for them, and yet they are sophisticated buyers,” Braziel said in a message. “I think it’s great for the market, and I’m happy to be part of it and maybe bring in some capital.”
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Edited by Sheldon Reback.