- FTX will begin repaying Bahamian creditors with claims under $50K on February 18 2025.
- Bitcoin investors will receive their original deposits without any profit in FTX repayment.
- FTX’s bankruptcy impacted the crypto market leading to similar crises for other companies.
FTX will start paying Bahamian creditors whose claims are under $50,000 beginning February 18, 2025 at 10:00 a.m. Eastern Time. The repayment amounts will be determined from customer account balances recorded in November 2022.
Bitcoin traded at approximately $17,000 back then but currently it maintains an approximate market value of $100,000. Creditors will lose income through this arrangement. The Bitcoin investors from 2022 will receive their deposited amount without any profit. They will also get an annual interest of 9%.
Reorganization Plan and Payment Process
FTX’s reorganization plan took effect on January 3, 2025. The plan prioritizes creditors with claims under $50,000. These smaller claims fall under the “Convenience Class” category. Payments will roll out within 60 days of the plan’s start. Creditors must meet specific conditions to receive funds.
The company partnered with BitGo to ensure secure fund distribution. BitGo’s infrastructure aims to prevent delays or errors. Larger claims will be addressed in future phases.
Impact of Bankruptcy and Legal Challenges
In late 2022, it experienced a liquidity crisis hence its collapse. Investigations revealed there was mismanagement of customer funds. The company allegedly funneled deposits to its sister firm, Alameda Research. This led to fraud accusations and financial instability.
Former CEO Sam Bankman-Fried faced prosecution and received a 25-year sentence. FTX’s downfall affected the broader crypto market. Other companies like Voyager Digital, BlockFi, and Celsius faced similar crises. Some declared bankruptcy, while others reorganized.
FTX’s repayment marks a key moment in the ongoing bankruptcy case. The first round of payments applies only to Bahamian creditors. Other creditors must wait until March 4, 2025. The repayment process remains complex due to legal disputes and asset value fluctuations.
