- FTX will begin distributing over $5 billion to approved users and creditors on May 30, nearly three years after the exchange collapsed.
- While creditors have expressed their excitement, others have criticized the plan to use crypto values, arguing that it may result in smaller returns due to market changes since the collapse.
FTX is preparing to return over $5 billion to its users and creditors. The repayments will begin on May 30 as part of its bankruptcy process. This step marks the next step in the bankrupt exchange’s plan to return money to those who are owed.
After three years of FTX bankruptcy, the collapsed exchange is starting to repay users who lost access to their funds. According to the notice shared on the 15th of May, the FTX Recovery Trust said that more than $5 billion will be sent out beginning May 30. These payments will go to the second batch of creditors who were approved, and they will be handled by BitGo and Kraken within one to three business days.
FTX Repayment Breakdown and Recovery Plan
According to the details, not all account holders will receive payments in this round. Four main creditor groups, including lenders, trading partners, vendors, and others, are set to receive between 54% and 120% of the total amounts they were owed when FTX collapsed in November 2022. Smaller unsecured claims will be repaid at about 61%, while intercompany claims between FTX-related entities will be repaid at the full rate of 120%.
The next round of repayments will be announced at a later date. John J. Ray III, who is leading the repayment process, described this stage as a significant step forward in offloading the debt, considering the complexity of the case. Many affected users have been waiting anxiously, and this marks important progress toward compensating those who lost their funds when the exchange collapsed.
In all of this, while many users are excited about the return of their funds, many have questioned the repayment plan, believing this method is unfair, as prices have changed a lot since then, and it could lead to lower returns for those affected.
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