FTX, the cryptocurrency exchange founded by Sam Bankman-Fried, has initiated the repayment process for creditors, nearly three years after its dramatic collapse in late 2022. The repayments officially began on February 18, with the distribution of funds to creditors whose claims are under $50,000.
According to Sunil Kavara, a representative for the estate’s largest creditor group, the payments will be made this week to settle smaller claims first. A U.S. bankruptcy judge approved FTX’s reorganization plan in October 2024, and the exchange is collaborating with BitGo and Kraken to facilitate the payouts. Creditors have the option to receive their funds in stablecoins.
The first round of repayments will amount to $800 million, part of a broader plan to distribute $1.2 billion. FTX aims to repay a total of $13 billion to creditors, though some funds are being held back for disputed claims. Kavara confirmed that $400 million of the minor claims will go to original FTX customers, while the rest will be allocated to claim purchasers. The initial payouts will cover approximately 162,000 claims out of a total of 460,000, including claims from FTX users in the Bahamas.
Founded in 2019, FTX grew to compete with major exchanges like Binance and Coinbase by 2021. However, its financial troubles came to light in late 2022, culminating in a bankruptcy filing and the arrest of Bankman-Fried in the Bahamas. Extradited to the U.S., Bankman-Fried was sentenced to 25 years in prison for fraud, though he has contested the fairness of his trial. Reports suggest that his parents have explored the possibility of seeking a pardon from former President Donald Trump.
Related topics:
Bybit Card Offers 14% Cashback for Valentine’s Day
SEC Acknowledges Grayscale’s Dogecoin and XRP ETF Filings, Opening Door to Potential Approval
US SEC’s Lawsuit Against Binance Paused as New Crypto Task Force Reviews Regulations
