FTX Begins Creditors’ Repayments After Two Years of Bankruptcy

FTX Initiates Repayment Plan for Creditors

Two years after its bankruptcy filing in 2022, FTX has commenced repaying creditors as per a court-approved plan.

Phase One: Focus on Small Claims

The initial phase of repayments targets creditors with claims under $50,000. These creditors are anticipated to receive their payments within 60 days, facilitated by Kraken and BitGo.

Plan Overview

The FTX Debtors Plan of Reorganization became effective on January 3, 2025, establishing a path to settle creditor claims. The plan aims to distribute approximately $14.7 billion to $16.5 billion to customers and creditors, representing nearly 119% of their claimed account value as of November 2022.

Market Reactions

FTX's downfall in 2022 resulted in Chapter 11 bankruptcy protection. Rumors regarding a possible presidential pardon for former CEO Sam Bankman-Fried due to political donations have surfaced, stirring controversy.

The bankruptcy plan's use of crypto prices from the collapse date has drawn criticism, with creditors expressing concerns about reduced repayment value due to subsequent price increases.

However, market analysts anticipate that FTX's repayments may inject liquidity into the crypto market, potentially triggering a bull run. As of the time of writing, the global crypto market cap stands at $3.49 trillion, with Bitcoin (BTC) trading above the $98K zone.