- FTX begins repaying creditors under a court-approved plan, two years after its 2022 bankruptcy filing.
- The first round of repayments targets creditors with claims under $50,000, to be completed within 60 days.
After two long years, FTX, the cryptocurrency exchange that collapsed in November 2022, has finally started repaying its customers. As of January 3, 2025, the court-approved Chapter 11 Plan of Reorganization is now in action, marking an important step in the company’s efforts to settle creditor claims.
According to the announcement, the initial distribution record began on January 3, 2025 and it focuses on creditors in the Plan’s Convenience Classes—those with claims of $50,000 or less. These creditors are expected to receive their payments within 60 days of the effective date, with the process managed by crypto firms Kraken and BitGo.
For creditors with larger claims, separate record and payment dates will be announced later. However, the reorganization plan is set to distribute approximately $14.7 billion to $16.5 billion to customers and creditors, promising nearly 119% of their claimed account value as of November 2022.
FTX’s Repayment Plan: Speculation, and Market Reactions
FTX’s downfall in late 2022, precipitated by a severe liquidity crisis, led to its filing for Chapter 11 bankruptcy protection. The company’s former CEO, Sam Bankman-Fried, was subsequently sentenced to 25 years in prison for fraud and is currently serving his sentence.
However, rumors are swirling that Sam Bankman-Fried might receive a presidential pardon due to his significant donations to the Democratic Party during the 2020 election. The speculation gained further traction after Tesla CEO Elon Musk commented on social media, tweeting that he would be “shocked if this doesn’t happen,” fueling the rumors.
At the same time, the bankruptcy plan’s use of crypto prices from when FTX collapsed has faced some backlash. Many creditors feel that the sharp rise in crypto values, like Bitcoin’s 500% jump since 2022, has made the repayment terms less favorable. Market analysts also believe that FTX’s repayments could bring much-needed liquidity to the crypto market, potentially triggering a bull run.
At the time of writing, the global crypto market cap stood at $3.49 trillion, a 2.5% increase in the past 24 hours. Currently Bitcoin (BTC) trading above the $98K zone.
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