Worldcoin’s 140% Rally Is Bringing Relief To 3AC, FTX Creditors

Worldcoin’s 140% Rally Is Bringing Relief to 3AC, FTX Creditors

(Bloomberg) -- It's been a testing year for creditors of bankrupt investment firms Three Arrows Capital and Alameda Research, but a recent surge in the price of crypto token Worldcoin is giving them some solace.

Worldcoin, the coin of the crypto project co-founded by OpenAI Chief Executive Officer Sam Altman, has jumped about 140% over the last seven days, according to CoinGecko data, rallying primarily after OpenAI announced the release of text-to-video application Sora. The advance has been losing some steam in the last 24 hours, with the token down 11% and trading at $6.81 apiece as of 1:20 p.m. London time on Tuesday. It reached an all-time high of $7.95 on Monday.

The coin's jump has boosted the portfolios of two of its largest holders: Three Arrows — also dubbed 3AC — and Alameda Research, the sister firm Sam Bankman-Fried's failed crypto exchange FTX, all of which collapsed during the 2022 crypto rout. The known crypto wallets of Three Arrows' liquidator Teneo hold around 75 million WLD tokens, currently worth around $520 million, whereas Alameda's known addresses have 25 million tokens worth $173 million, according to data on the Arkham Intelligence platform.

Worldcoin did not immediately respond to a request for comment.

“Worldcoin is a crazy project but these kind of things really help creditors in the bull market. The rally in the token is a huge home run for the creditors of both the bankrupt firms, especially for 3AC,” Thomas Braziel, co-founder and managing partner of distressed asset investment firm 117 Partners, said in an interview. Braziel's firm holds claims for both firms, he said.

“With Alameda, all that money is going to flow mostly to customers first, then other creditors as per the restructuring agreements,” Braziel said. “It's not an earth shattering amount but it provides some relief. But for 3AC it's a huge driver as they had lost all their Bitcoins and all they were left with was their venture investments book.”

Three Arrows co-founder Su Zhu took to X, the social media platform previously known as Twitter, to comment on the Worldcoin price surge on Monday.

Worldcoin, which launched in July, uses a small device called an “orb” to scan people's eyeballs in order to generate a unique digital identity. That identity, or World ID, grants its holder “proof of personhood” in Worldcoin parlance. Users receive Worldcoin tokens in return for participating. Other than sharing a founder, WorldCoin and Open AI are not formally connected.

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