FTX will begin repaying creditors with claims under $50K on February 18, 2025, based on November 2022 deposit values.
Because Bitcoin has surged from roughly $17K to nearly $100K since November 2022, many customers will miss out on significant gains.
To handle the distribution of funds securely and efficiently, FTX has partnered with BitGo, a leading digital asset custody and security provider.
FTX, the embattled cryptocurrency exchange, announced today that it is set to start repaying Bahamian creditors with claims of less than $50,000 beginning at 10:00 a.m. Eastern Time on February 18, 2025.
In a significant development, Sunil – a representative for FTX creditors – confirmed that once these repayments are completed, all related claims will be cancelled. Notably, these repayment figures are based on the US dollar value of customer deposits as of November 2022, when Bitcoin was trading around $17,000.
FTX Set to Repay Its Customers in February
Given that Bitcoin now trades at roughly $100,000, customers have missed out on the potential gains that could have multiplied their assets by nearly six times.
For example, if a customer held $50,000 worth of BTC in November 2022, their funds could be valued at approximately $295,000 today. Instead, under the current repayment plan, they will only recover the original deposit value, with 9% interest per annum.
FTX Repayments: 18 Feb 2025
Funds available from 10am ETFTX Claims < $50k
FTX Creditors in the Bahamas process have email confirmation that repayments will start on 18 Feb 2025
9% interest per annum from 11 Nov 2022 pic.twitter.com/FrmDN4qiK7
— Sunil (FTX Creditor Champion) (@sunil_trades) February 4, 2025
FTX Repayments: 18 Feb 2025
Funds available from 10am ETFTX Claims < $50k
FTX Creditors in the Bahamas process have email confirmation that repayments will start on 18 Feb 2025
9% interest per annum from 11 Nov 2022
— Sunil (FTX Creditor Champion) (@sunil_trades)
The planned distribution comes a few weeks after the company announced in December that its reorganization plan had been approved. FTX’s reorganization plan, which took effect on January 3, 2025, outlined a phased approach to debt repayment, prioritizing the “convenience classes” – those with claims under $50,000.
At the time, the defunct exchange that the initial batch of payments will roll out within 60 days of the effective date, provided creditors meet certain conditions. Now with everything set in place, the firm has slated February 18 for the distribution.
To ensure a smooth distribution of the assets, FTX has partnered with BitGo, a leading digital asset custody and security firm renowned for its robust infrastructure and transparency. BitGo’s advanced systems are expected to handle the secure transfer and management of funds, minimizing potential delays or errors in the distribution process. Subsequent repayments, likely involving larger claims, will be announced as the process unfolds.
This repayment strategy is a critical component of FTX’s approved reorganization plan, designed to restore some measure of confidence among creditors and stabilize the troubled exchange.
The Collapse of FTX: A Cautionary Tale for Crypto
FTX’s repayment plan comes in the wake of one of the most dramatic failures in crypto history. The exchange for Chapter 11 bankruptcy protection in late 2022 after a severe liquidity crisis exposed massive mismanagement of customer funds. Investigations revealed that FTX funneled customer deposits to its sister company, Alameda Research, through a covert algorithm that allowed backdoor transfers – actions that ultimately led to allegations of fraud and financial impropriety.
Former CEO and founder Sam Bankman-Fried (SBF), once a prominent figure in the crypto industry, has since been prosecuted for his role in the collapse, with a lengthy prison sentence. SBF was for a series of crimes relating to FTX collapse for 25 years in prison.
The fallout from FTX’s failure has not only shaken investor confidence but also had a ripple effect across the crypto industry. Other firms, such as Voyager Digital, BlockFi, and Celsius, suffered similar liquidity crises, with some ultimately folding while others have completed bankruptcy proceedings and issued public apologies.
Meanwhile, FTX’s current repayment initiative represents an effort to salvage what remains of its customer trust and to settle outstanding claims, even as the broader industry continues to grapple with the lessons learned from one of its most cautionary episodes.