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FTX Digital Markets, the Bahamian subsidiary of the collapsed cryptocurrency exchange FTX, will begin repaying creditors next week.
The repayment process follows FTX’s reorganization plan, which took effect on January 3 after years of bankruptcy proceedings and litigation to recover funds.
These repayments will target claims under $50,000 classified as “convenience class” creditors. These individuals will receive 119% of their adjudicated claim value, totaling $1.2 billion in distributions.
According to a February 14 X post from FTX Creditor Champion, Sunil Kavuri, the first batch of repayments will be processed on February 18, 2025.
An estimated $17 billion will be disbursed in stages, with an initial payout of $7 billion projected for larger claimants.
While smaller claims will be prioritized, larger claims exceeding $50,000 are expected to be addressed in later distributions, likely beginning in the second quarter of 2025.
Those who fail to meet these requirements will not be included in the February 18 distribution but may qualify for future payouts if outstanding issues are resolved. Excluded creditors include those still under review, claims exceeding $50,000, or individuals who have not completed the necessary KYC, tax, or distribution provider steps.
FTX customers eligible for repayment must complete Know Your Customer (KYC) verification, submit a W-8 BEN tax form, and onboard with a designated distribution partner, BitGo or Kraken.
Within days, the company filed for bankruptcy, and its CEO, Sam Bankman-Fried (SBF), stepped down. He was later convicted and sentenced to 25 years in prison.
FTX, once a dominant force in the crypto exchange space, collapsed in November 2022 after facing a severe liquidity crisis.
Legal proceedings against four other former FTX and Alameda Research executives wrapped up by the end of 2024.
FTX’s restructuring plan, approved in October 2024, prioritized repayments to users with claims under $50,000. Around 98% of affected users will receive 119% of their declared funds.
Among those affected was investor Kavuri, who claimed to have endured two years of financial distress after losing over $2 million in FTX’s downfall.