The bankrupt cryptocurrency exchange FTX has announced that it will begin repaying customer funds on February 18, 2025. This step marks a significant milestone in one of the largest insolvency proceedings in crypto history.
Initial repayments to creditors with claims under $50,000 will commence on February 18, 2025. A total of $16 billion is expected to be distributed to eligible creditors. As with the Mt. Gox case, the payouts will be facilitated in collaboration with platforms such as BitGo and Kraken to ensure the secure and efficient distribution of funds. The repayments are based on cryptocurrency valuations from November 2022, sparking discussions about the fairness of the payouts.
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Details on FTX repayments
FTX has announced that the first payments will be made to creditors with claims under $50,000. This group, known as the "Convenience Class," includes creditors with recognized claims who have completed all necessary steps to confirm their claims. Affected FTX customers can expect to receive their payments within one to three business days after February 18, 2025.
The total planned repayments amount to $16 billion. The funds for these payments come from the sale of FTX assets, including approximately $11 billion in cryptocurrencies and $4.2 billion worth of shares in Anthropic AI.
Cryptocurrency valuation and criticism
A controversial aspect of the FTX repayments is the valuation of cryptocurrencies at the time of the collapse in November 2022. At that time, Bitcoin was trading at $16,000, Ethereum at $1,250, and Solana at $9. Those who held one Bitcoin on the exchange will receive 100% of the $16,000 back. Compared to today's price of $96,000, this amount is painful. The extreme case of Solana means a "loss" of 95% at the current price of $194.
There are also some nuances regarding the total sum of $16 billion. In total, non-government creditors will receive "only" $12.3 billion, as indicated in the FTX balance sheet above. Estimates suggest that the first tranche accounts for less than 20% of all customers. Therefore, more than $3 billion in FTX repayments should not be expected to impact the market in the coming weeks.
FTX Repayments
1st Distribution: 18 Feb 2025 , 10pm ET
Claims <$50k ~ $1.2bn (119%) ~ $345m non KYC yetWill be less than $1bn
Q2 25 likely: No date set yet
Claims >$50k: $17bn+ (stages~$7bn first)*No $7bn next week pic.twitter.com/pKDf6buieN
— Sunil (FTX Creditor Champion) (@sunil_trades) February 12, 2025
