- FTX will start repaying creditors on February 18, with an initial payout of $1.2 billion.
- Some analysts believe the repayments could impact market liquidity.
FTX Digital Markets, the Bahamian subsidiary of the collapsed cryptocurrency exchange, will begin repaying creditors on Feb. 18. The initial phase involves handling the claims made by the users of up to 50,000 dollars, a significant step in the ongoing bankruptcy process.
The repayments will commence at 3:00 pm UTC, as per FTX creditor Sunil, an FTX Customer Ad-Hoc Committee member. The first distribution is planned to repay around $1.2 billion to the victims. The distribution will be made according to the asset values at the time of filing for bankruptcy in November 2022.
FTX Repayments: 18 Feb 2025
Funds available from 10am ET
FTX Claims < $50kFTX Creditors in the Bahamas process have email confirmation that repayments will start on 18 Feb 2025
9% interest per annum from 11 Nov 2022 pic.twitter.com/FrmDN4qiK7
— Sunil (FTX Creditor Champion) (@sunil_trades) February 4, 2025
According to Monolith.vc, the initial recipients are classified as the “Convenience Class” of claimants. They will be paid at par, together with 9% per year post-petition interest. However, those with large claims are still waiting for further information. As Crypro News Flash reported, BitGo, a crypto custodian, has been appointed to oversee the distribution process. Expected payments will amount to between $14.7 billion and $16.5 billion, which will be made in phases.
Will the Repayment Stabilize the Market?
The repayments have raised concerns as to their impact in the cryptocurrency market. While some people consider them as one of the indicators of the industry revival, others believe that the size of such a payout cannot affect the prices.
10x Research’s founder, Markus Thielen, noted that the $1.2 billion distribution is “too small to move the needle” in terms of the market share. However, Bitget Wallet COO Alvin Kan said a part of the money can be reinvested into cryptocurrencies. He noted that while investors’ sentiment might be boosted, the market quantity measures might remain constrained because of the money being repaid.
However, creditors have concerns about FTX using the 2022 price valuations. Bitcoin has been up by more than 370% since the exchange went down, meaning creditors are recovering far less than what the assets are currently worth.
Potential Selling Pressure from Solana Unlock
In addition to the direct repayments, issues have been raised over FTX’s proposal to unlock 11.2 million SOL tokens, which is equivalent to about $2.06 billion, on March 1. The decision may put selling pressure on SOL, which has been experiencing a decline in prices.
Crypto analyst Crypto Rover believes that the entire repayment process of FTX could bring in as much as $16 billion into the market. This could change trading conditions and enhance Bitcoin’s and altcoins’ liquidity and fluctuation. However, the risk of selling remains probable if the recipient sells it upon repayment of the working capital.
BREAKING:
FTX REPAYMENTS WILL START TODAY!
$16,000,000,000 WILL FLOW INTO BITCOIN & ALTCOINS.
THIS IS GOING TO BE MASSIVE!
pic.twitter.com/6r1xAW8y9E
— Crypto Rover (@rovercrc) February 18, 2025
FTX’s collapse in 2022 occurred after it emerged that customer funds had been siphoned off to Alameda Research to the tune of $8 billion, in an unlawful manner. The collapse of the exchange led to a number of insolvency issues that affected most of the industry as well as increased regulatory measures.
According to the FTX Creditor Recovery Summary, claimed amounts total $11.75B, with specific creditor recoveries ranging between 123% to 138%. Some may get more than they have initially claimed; however, if substantial liquidations happen, further selling pressures may arise.
