FTX to Start Paying Creditors on May 30 After 27 Months in Bankruptcy

27-04-2025
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FTX, the cryptocurrency exchange that shocked the industry when it collapsed in late 2022, is expected to start paying creditors on May 30. This is a major milestone in the bankruptcy process that has lasted more than two years.

Up to $11.4 Billion in Payments
According to court filings and a report from Bloomberg, FTX, which is run by restructuring expert John Ray III, will pay creditors with claims of $50,000 or more. The payments will come from the company's $11.4 billion cash reserves.

However, the process remains complicated. Andrew Dietderich, an attorney for FTX's estate, revealed that the company is facing a large number of claims, many of which are fraudulent or inflated, with the total value of the claims reaching $27 trillion.

How Much Do Creditors Get?
All digital asset claims are valued at the time of FTX's bankruptcy filing on November 11, 2022. The company said some creditors could receive up to 118% of the value of their claims in cash. However, many investors have objected to this valuation, arguing that it does not reflect the strong growth of the crypto market since FTX's collapse.

Since November 2022, many major cryptocurrencies have surged:

- Solana (SOL): Up about 650%

- Bitcoin (BTC): Up 500%

- XRP: Up 450%

As a result, creditors feel disadvantaged as the repayment is not based on the current value of the assets. Sunil Kavuri, who represents a large group of FTX creditors, stressed that the repayment is a step forward but still unfair when based only on the value in 2022.

In addition, FTX committed to paying an additional 9% interest per year on unresolved claims.

Prolonged Repayment Process
Although payments began in late May, the entire repayment process could take months as FTX needs to process outstanding claims and close its books.

BitGo and Kraken – two major cryptocurrency companies – have announced that they will participate in supporting FTX’s refund. If all eligible users file their claims, the total amount FTX could distribute is up to $16 billion.

FTX EU and Legal Issues
Earlier this year, Backpack Exchange – a cryptocurrency trading platform founded by former employees of FTX and Alameda Research – announced that it had acquired FTX EU, the European arm of FTX. However, FTX denied this, saying that the deal has not been approved by the US Bankruptcy Court in Delaware.

In the US, the Department of Justice is seeking to recover $13.25 million in political contributions linked to former FTX executives. Judge Lewis Kaplan, who oversees the case of former FTX CEO Sam Bankman-Fried, granted an extension of the negotiations until January 15 to clarify legal issues related to the political contributions.

FTX’s move to begin repaying creditors marks a major step forward in its protracted bankruptcy process. But with disputes over how to value assets and how to resolve outstanding claims, the FTX saga is far from over.