FTX
After more than two years of legal battles and uncertainty, creditors of the now-defunct FTX exchange will finally start receiving their payouts on February 18, 2025. This marks a major step in the bankruptcy process of the once-prominent crypto trading platform, which collapsed in November 2022, leaving billions of dollars in frozen assets.
Who Will Get Paid First?
FTX has structured its repayment process in phases. The first group to receive funds will be creditors with claims of $50,000 or less, categorized as "Convenience Class" creditors. These individuals and businesses will not only be reimbursed the full amount of their approved claims but will also receive an additional 9% annual interest calculated from the date of FTX’s bankruptcy filing.
This decision is aimed at providing financial relief to the largest number of affected users as quickly as possible. For many small and medium-sized investors who lost access to their funds in 2022, this repayment offers long-awaited closure.
Larger Claims to Follow in Q2 2025
Creditors with claims exceeding $50,000 will have to wait a little longer, as their payments are scheduled to begin in the second quarter of 2025. The exact structure of these repayments is still being finalized, with ongoing negotiations determining the distribution process.
While FTX's bankruptcy initially seemed like a financial disaster for its customers, the eventual payout has been described as a surprising turn of events. Many expected a lengthy and complicated legal process that could take years, if not decades, to resolve. However, through efficient asset liquidation and strategic recovery efforts, FTX’s estate has been able to generate enough liquidity to ensure substantial repayments.
Which Tokens or Coins Might Be Sold to Repay FTX's Debt?
To repay its creditors, FTX plans to sell a substantial portion of its cryptocurrency holdings. One of the main tokens set for liquidation is Solana (SOL). In May 2024, FTX sold SOL tokens worth approximately $2.6 billion, with notable buyers including Figure Markets and Pantera Capital. For example, Figure Markets purchased 800,000 SOL tokens for around $80 million, which was significantly below the market price at the time.
In addition to Solana, FTX holds stakes in various crypto funds that are also up for sale. In November 2024, the exchange received approval to sell assets worth approximately $873 million, including shares in the Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE). These funds are being used to repay creditors affected by FTX’s collapse in 2022.
The Role of BitGo in the Payout Process
The repayment process is being managed in partnership with BitGo, a leading digital asset custodian. All creditors must verify their BitGo accounts and ensure their details are accurate before the final payment date. Failure to do so could result in delays, as once transactions are processed, they cannot be reversed.
This method of digital asset distribution represents a modernized approach to bankruptcy settlements, leveraging blockchain security and efficiency to streamline the payout process.
A Step Towards Restoring Trust in Crypto
FTX’s downfall in 2022 was one of the most significant collapses in cryptocurrency history, shaking confidence in the industry. While many investors suffered massive losses, the structured repayment plan offers hope that trust in digital asset platforms can be restored.
As the first payouts begin on February 18, all eyes will be on how smoothly the process unfolds. If successful, this case could serve as a model for handling future cryptocurrency bankruptcies, demonstrating that even in the volatile world of crypto, investor protection remains possible.