FTX has begun paying creditors with claims of up to $50.000, with the total estimated at $1.200 billion. The next round of repayments is scheduled for April 11, expanding the scope to larger amounts.
On February 18, FTX took a significant step in its process of repaying creditors. The exchange, which faced a financial collapse in 2022, began distributing the first payments corresponding to claims of up to $50.000. This process, which is part of a broader financial reorganization plan, aims to return funds to those affected by the bankruptcy of the well-known platform.
According to the most recent reports, to date Around $800 million of the $1.200 billion initially estimated have been paid for this first round. This has benefited approximately 162.000 accounts, constituting 35% of the 460.000 claims deemed eligible for refunds.
Additionally, FTX has set the date for the next round of payments, which will take place on April 11, 2025, now extending coverage to claims over $50.000, as well as to those creditors with smaller amounts who have not received their payment in this first phase.
The start of these repayments is a significant step forward in the liquidation of FTX's debts, and has generated a wave of expectations around market stability. Efficiency in this process is key to restoring the investor community's confidence in the sector; in addition, several analysts estimate that much of this liquidity will return to the crypto market.
The first round of refunds begins
February 18 marked the start of payments for creditors with claims of up to $50.000. FTX, in collaboration with other crypto market platforms, has facilitated the distribution of these funds, which include an annual interest rate, which seeks to compensate for the time elapsed since the exchange's bankruptcy in November 2022 and the inconvenience caused to those affected.
To date, around $800 million has been processed, benefiting approximately 162.000 accounts.
La Second round of payments is scheduled for April 11, with distribution scheduled to begin on May 30. This phase, according to the exchange’s statement, will expand the scope to include claims over $50.000, as well as smaller claims that were not processed in the first round due to various reasons, such as not completing the claim requirements.
PREPARE YOUR WALLETJohn Ray III, current CEO of FTX and plan administrator of the FTX Recovery Trust, commented that this tiered approach to the repayment plan seeks to ensure that all creditors receive their due payment in an organized and transparent manner.
“We are pleased to begin initial distributions today and set the schedule for our next distribution”, Ray III commented.
Overall, expectations are high among creditors, especially among those with larger outstanding amounts, who will see this step as a move towards the definitive resolution of their claims.
The impact of FTX payments
The start of payouts and the planning for the next rounds of FTX refunds, in general, have sparked a wave of optimism among cryptocurrency investors and users. The expected additional liquidity may impact the price performance of major cryptoassets, such as Bitcoin and Ethereum, as creditors look to reinvest recovered funds.
However, this optimism was dampened on Tuesday by an immediate hit to the price of Bitcoin, which touched $93.400, reflecting the volatility inherent to the crypto market at critical times. A few hours later, the price of Bitcoin recovered, trading above $95.000 at the time of writing.
Source: CoinMarketCap
Despite the momentary crash in Bitcoin's price, many in the crypto community believe that these refunds could be the beginning of a new phase for altcoins. Analysts point out that a significant portion of these billions that FTX is returning to its investors could enter the market again, flowing especially into altcoins or into regulated instruments such as Bitcoin and Ethereum-related ETFs.
Investing in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.
