In the wake of the collapse of FTX, the once-prominent cryptocurrency exchange run by Sam Bankman-Fried, luxury properties acquired by the company will be put up for sale.
According to Bloomberg reportliquidators overseeing FTX’s assets are preparing to sell properties acquired during the cryptocurrency exchange’s heyday before its collapse in delayed 2022.
A risky gamble in FTX real estate
A $30 million penthouse built by Orchid in the Bahamas, where now-convicted Bankman-Fried lived and worked with his team until FTX’s collapse, is the central property up for sale. But industry experts say FTX may have overpaid for the properties, complicating its break-even prospects.
Real estate brokers and developers point out that the FTX acquisitions contributed to an inflated market, reportedly analogous to the volatility of the cryptocurrency world at the time. Despite recovering FTX files cryptocurrency investmentsthe same may not be true for its real estate business in the Bahamas.
After the collapse, former FTX CEO Ryan Salame and other key figures at the company spent $255 million on properties on Up-to-date Providence Island.
These properties include 52 apartments, offices and plots clustered around luxury developments such as Albany. According to Bloomberg, the charm of Albany, known for its exclusivity and amenities for the super-rich, attracted top FTX executives who wanted to make a name for themselves in the gated community.
However, there are questions about the potential overpayment for these properties, especially given current market conditions.
Potential impact on profitability
Although FTX managed to recover a significant portion lost funds in times of decline, real estate interests present a more complicated challenge. Liquidators overseeing FTX’s assets in the Bahamas are expected to begin the sale process soon. However, realtors express doubts about achieving the desired prices for real estate.
The Bahamas luxury real estate market saw a 15% price escalate last year, but specific purchases made through the exchange may not bring the expected profits. Factors such as taxes and fees, combined with concerns about overpayment, can impact sales profitability.
Earlier this year, PwC, the consulting firm appointed as liquidator of the company’s assets in the Bahamas, asked real estate agents for proposals to market and sell properties acquired by Bankman-fried and his team.
The sale process is expected to begin in the coming months, with brokers anticipating challenging conditions to achieve optimal returns.
While the exact estimated value of the FTX property remains undisclosed, Bahamians agree that the sale will support put the Bankman-Fried saga behind them and allow the country to focus on future progress.
Meanwhile, Sam Bankman-Fried was recently sentenced to 25 years in prison transferred to a transient detention center in Oklahoma. Bankman-Fried, however, advocates a different solution, hoping to mitigate the sentence by officially filing an appeal against the verdict.
Currently, the defunct exchange’s native token, FTT, has experienced over a month of sideways price movement, resulting in its current trading price of $1.60.
Featured image from Shutterstock, chart from TradingView.com
