Boutique investment firm Arceau has developed a platform to automate the process of verifying cryptocurrency bankruptcy claims in firms like FTX or Celsius, allowing it to buy out smaller creditors who found it hard to access traditional bankruptcy markets.
Last year saw a number of large crypto firms collapse, making unwitting creditors out of thousands of investors, whose assets are now trapped within interminable bankruptcy processes.
One avenue open to those whose assets are locked up in a bankruptcy estate is to sell their claims at a discount at marketplaces such as X Claims or Claims Market. But there are very few providers of liquidity for relatively small claims of around $50,000 because of the cost of the 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.” That’s a 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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