Hedge funds including Diameter Capital Partners, Canyon Partners, and Farallon Capital Management have acquired an $874.5 million debt obligation that FTX owed to BlockFi Inc. This marks the largest transaction in the growing market for debt linked to Sam Bankman-Fried’s fraud-affected exchange. The deal indicates a robust secondary market for creditor claims following FTX's collapse, with debts initially valued at about 10 cents on the dollar now expected to be fully repaid with interest, benefiting both customers and hedge funds.

Hedge funds including Diameter Capital Partners, Canyon Partners and Farallon Capital Management scooped up an $874.5 million obligation FTX owed to BlockFi Inc., according to people familiar with the matter, marking the largest trade to-date in the surging market for debt tied to Sam Bankman-Fried’s fraud-tainted exchange.The transaction is the latest sign that the surprising secondary market for creditor claims that’s emerged from FTX’s ashes will be a boon for debt investors. Obligations fetching about 10 cents on the dollar when FTX collapsed will be fully repaid with interest, a rare win benefiting customers and hedge funds that amassed large bets when prospects for repayment were dim.

Hedge Funds Acquire $875 Million BlockFi Debt from FTX