FTX has finally started paying back its creditors, nearly three years after its sudden collapse. The process began on February 18, with the first payouts going to creditors with claims of $50,000 or less. This group, called the “Convenience Class,” is set to receive full repayment, including 9% interest. Payments are expected to reach recipients within one to three business days.
FTX Starts Creditor Payments
Defunct crypto exchange FTX has partnered with BitGo and Kraken to handle the repayment process. According to Sunil Kavara, a representative of the estate’s largest creditor group, this first round of payments will cover around 162,000 claims out of the estimated 460,000 creditors.
Meanwhile, in this 162K creditors’ claims include the creditors who have a claim of less than $50k.
In total, FTX plans to distribute $17 billion, with $7 billion allocated for the first phase. The repayments followed a long legal process after the exchange went bankrupt in November 2022.
What About Creditors Owed More Than $50K?
People with claims exceeding $50,000 will have to wait a bit longer. Their repayments are set to begin in the second quarter of 2025. The key date to watch is April 11, when FTX will confirm claims over $50,000. The actual payouts for this group are scheduled for May 30.
To receive funds, creditors must complete Know Your Customer (KYC) verification and submit necessary tax forms. If they miss the deadline, they can still qualify for later distributions.
How Much Will Creditors Get?
FTX’s recovery estimates suggest that total payouts could reach between $14.46 billion and $16.25 billion. The average recovery rate is projected to be between 123% and 138%, meaning some creditors might even receive more than their original claims.
While all secured and customer claims are expected to be fully covered, the exact recovery amount varies due to factors like post-petition interest and remission fund recoveries.
FTX’s Impact on Solana (SOL) Price
FTX’s bankruptcy has also affected the Solana (SOL) market. The exchange has been offloading its SOL holdings, adding to selling pressure. Last week, its liquidation wallet sent SOL tokens to Binance, pushing prices lower.
Additionally, an upcoming unlock of 11.2 million SOL, tied to FTX’s early investments, is expected to add further selling pressure.
As a result, SOL’s price has dropped by 10% in a day, bringing it close to $160. With FTX continuing to sell assets, the Solana market remains under pressure.
