[NEWS] FTX to Begin Creditor Repayments After President Trump's Inauguration

On January 3, the restructuring plan for cryptocurrency exchange FTX, approved in October 2024, was officially implemented. Under this plan, repayments to certain creditors are set to begin within 60 days.

The deadline to meet the prerequisites for the initial distribution is January 20, suggesting that repayments are unlikely to commence before this date. Many speculate that the repayments will start after the inauguration of the next U.S. President, Donald Trump.

If all users complete their claims, FTX is expected to pay a total of $16 billion (approximately ¥2.5 trillion). FTX had previously expanded its influence rapidly in the cryptocurrency market through aggressive fundraising and acquisitions.

However, issues with internal controls and opaque financial transactions with affiliated entities were highlighted, eventually leading to customer fund shortages and liquidity crises, culminating in its collapse.

Currently, as part of the bankruptcy proceedings, FTX and its affiliates aim to liquidate their assets to maximize creditor repayments.

Under FTX’s restructuring plan, users with claims under $50,000 (approximately ¥7.9 million) will be prioritized for cash repayments, with all users expected to receive repayments in stages.

Creditors eligible for the initial repayment must complete identity verification, submit tax documents, and register with Kraken and BitGo for payment processing. Approximately $1.2 billion (about ¥190 billion) is expected to be distributed to creditors in this group.

Furthermore, the plan outlines that over 98% of all users are projected to recover 119% of the recognized value of their claimed assets.

According to a July 2024 report from Glassnode, creditors involved in the Mt. Gox case—where Bitcoin was lost—tended to opt for repayment in Bitcoin rather than liquidating their holdings into fiat currency.

This trend is notable in light of FTX's bankruptcy, as Bitcoin has risen more than 300% since the company filed for bankruptcy in November 2022.

While some users have expressed dissatisfaction with the repayment amount being pegged to the recognized claim value, the anticipated $16 billion settlement—likely to be redistributed into the cryptocurrency market—has captured significant attention. Analysts expect more than $16 Billion in funds to re-enter the crypto market, potentially driving further activity.

In December 2022, just a month after FTX’s collapse, its founder, Sam Bankman-Fried, was arrested in the Bahamas and extradited to the United States.

He was subsequently charged with multiple offenses by the U.S. Department of Justice, Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC). These charges include wire fraud, securities fraud, money laundering, and campaign finance violations.

Last March, Bankman-Fried was sentenced to 25 years in prison. His defense team has since filed an appeal for a retrial in a higher court.

Reference: Announcement
Image: Shutterstock

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