FTX, the collapsed cryptocurrency exchange that shook the industry in late 2022, is set to begin repaying its creditors on May 30, marking a major milestone in its lengthy bankruptcy proceedings.
According to court filings and a Bloomberg report, the exchange—now led by restructuring expert John Ray III—will initiate repayments for creditors owed more than $50,000.
These payments will be drawn from FTX’s $11.4 billion cash reserve.
FTX Lawyer Says Estate Facing ’27 Quintillion’ Claims, Many Fraudulent
Andrew Dietderich, an attorney for the estate, noted that the company is dealing with a staggering number of claims, including many that are fraudulent or inflated, totaling what he called “27 quintillion” submissions.
Some smaller creditors, categorized under the “convenience class,” have already received repayments.
All digital asset claims are being valued based on the date FTX filed for bankruptcy—November 11, 2022.
While FTX has stated that many creditors may receive up to 118% of their claim value in cash, critics argue that this figure doesn’t reflect the massive gains in crypto prices since the collapse.
Major cryptocurrencies like Solana, Bitcoin, XRP, and Ethereum have surged significantly since the petition date.
Solana alone has jumped around 650%, while Bitcoin and XRP are up 500% and 450%, respectively.
However, because claims are settled at November 2022 values, many creditors feel shortchanged.
“This brings some closure,” said Sunil Kavuri, who represents a major FTX creditor group. “But the recovery is based on outdated prices—creditors aren’t being made whole in crypto terms.”
FTX will also pay a 9% annual interest rate on claims still outstanding.
While the repayments are a step forward, the full process could extend for months as the company works to resolve remaining claims and close the books on one of crypto’s largest-ever collapses.
BitGo and Kraken to Assist with FTX Repayments
Crypto firms BitGo and Kraken have announced their involvement in assisting with FTX’s repayments.
If all eligible users file complete claims, FTX could distribute approximately $16 billion in total recoveries.
Earlier this year, Backpack Exchange, a cryptocurrency trading platform founded by former FTX and Alameda Research employees, claimed that ihadas officially acquired FTX EU, the European arm of the collapsed FTX exchange.
However, FTX denied the claims, saying that the deal had not been approved by Delaware’s US Bankruptcy Court.
Meanwhile, in the US, the Justice Department is seeking the return of up to $13.25 million in political contributions linked to former FTX executives, as revealed in a recent federal court filing.
Judge Lewis Kaplan, who is overseeing the criminal proceedings against former FTX CEO Sam Bankman-Fried and his associates, approved the government’s request for an extension until January 15 to negotiate with various political action committees (PACs).
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