Repayments Progress Underway
FTX has commenced a major round of reimbursements, distributing around $5 billion to creditors who have successfully completed the steps needed to qualify for payment. The process, launched on 30 May, follows a structured repayment plan approved under bankruptcy proceedings.
Creditors fall into various categories based on the type of claim they filed. Each category has been assigned a specific repayment percentage according to court arrangements. Those who used FTX’s international platform (formerly FTX.com) are being issued around 72% of their accepted claims. Users of the United States branch are receiving approximately 54%.
Other categories include creditors who provided unsecured loans or digital asset loans to the exchange before it collapsed. These claims are being honoured at a rate of 61%. There’s also a category known as Convenience Class, which consists of smaller claims under $50,000. These are being paid out at 120% of their accepted value, a step aimed at resolving lower-value cases quickly.
Image 1: FTX begins refund (Source: FinanceFeeds)
Funds are being sent via two crypto service providers, Kraken and BitGo, which were selected to carry out the distributions on behalf of the FTX Recovery Trust. Creditors who completed identity verification, tax submissions, and registration with one of these platforms should expect to see their funds arrive within a few business days of the official launch date.
Conditions for Receiving Payment
To receive funds, creditors had to access the FTX customer portal and carry out specific steps before the deadline. These included verifying their identity, submitting relevant tax documents, and choosing either Kraken or BitGo for payment. Those who didn’t finish these actions by the required date were not included in this round but may still be eligible for future payouts if they meet the requirements in time.
This $5 billion distribution is part of a larger recovery effort put in place after the exchange’s collapse in 2022. It follows an earlier payout round that took place in February, which saw $1.2 billion distributed to claimants with balances under $50,000. The earlier phase helped clear smaller accounts and laid the groundwork for more complex claims now being addressed.
The FTX Recovery Trust has said more payment phases are expected, though exact dates for upcoming rounds have not yet been confirmed. Additional announcements will be made through official channels as the process continues.
Ongoing Discontent Over Valuation Method
Although progress is being made, the approach used to calculate repayment amounts has triggered concern and backlash among creditors. Under the terms of the court-approved plan, payouts are based on the value of crypto holdings at the time FTX entered bankruptcy proceedings — not current market prices.
This means that users who held crypto like Bitcoin, Ethereum, or other tokens on the platform during the market’s low point in late 2022 are receiving compensation based on those depressed values. Since then, the market has recovered significantly, with Bitcoin and other digital assets reaching much higher prices.
As a result, many affected users believe they are being short-changed. Some report receiving only between 10% and 25% of what their crypto would be worth at today’s prices, even after repayments. These complaints have been echoed across online forums and legal discussions. Several creditors have continued to challenge this approach, arguing that they are not being fairly compensated for the true value of their lost assets.
Adding to the frustration is the exclusion of certain countries from the repayment process altogether. People residing in jurisdictions subject to specific legal or regulatory restrictions — including Egypt, Iran, Russia, and a number of others — have been told they are ineligible to receive funds. The ruling affects a large number of users, leaving them without a clear path forward as repayments proceed elsewhere.
Image 2: FTX (Source: Crypto India)
Market Speculation Over Incoming Liquidity
The return of such a large amount of capital to former FTX customers has drawn the attention of market watchers, especially within the crypto sector. Analysts are keeping a close eye on how recipients might use the recovered funds. Some expect that at least part of the money could flow back into digital asset markets, depending on sentiment and market conditions.
Others believe that much of the capital will be converted into fiat currency and withdrawn, especially by users who lost trust in the system following the exchange’s collapse. The exact impact remains to be seen, but the scale of the repayments has the potential to affect trading volumes and short-term price movements across several cryptocurrencies.
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FTX’s administrator has indicated that recovery efforts are continuing. While much has already been recovered and returned, work is still underway to resolve outstanding claims and track down remaining assets tied to the former exchange. Creditors are being encouraged to complete the required steps if they haven’t done so already, as later rounds of payments may follow a similar structure.
For many, the repayments offer some relief — but not closure. With large portions of value lost and questions about fairness still looming, the fallout from FTX’s failure continues to be felt across the industry and among the individuals who once trusted it.
