Daniel Walker
More than two years after its sudden downfall in November 2022, FTX is preparing to start repaying claims exceeding $50,000 on May 30, marking a significant step in the ongoing bankruptcy proceedings.
Bankruptcy attorney Andrew Dietderich revealed that the exchange, now under the leadership of CEO John Ray III, will make its initial payments to major creditors at the end of May. According to Bloomberg, FTX has accumulated $11.4 billion in cash for these repayments. However, Dietderich also noted that the company faces an overwhelming “27 quintillion” claims, many of which are fraudulent or disputed.
Discrepancies in Repayment Value Raise Concerns
While some “convenience class” creditors have already received payments, the valuation of digital asset claims remains a controversial issue. FTX has estimated that creditors will recover 118% of their claims in cash, but many disagree with this assessment.
The key issue is that repayments are based on crypto valuations as of FTX’s bankruptcy filing on November 11, 2022. Since then, major cryptocurrencies have seen significant price increases, leaving many creditors feeling shortchanged.
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Solana (SOL) has surged 650% since the filing date.
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XRP has climbed 450% in value.
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Bitcoin (BTC) has increased by 500%.
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Ethereum (ETH) has risen nearly 47%, despite recent market fluctuations.
Because claims are settled at pre-surge values, many creditors argue they are not receiving full compensation in crypto terms.
FTX Faces Pressure to Expedite Payments
“The repayments will provide closure to those impacted by this catastrophic event,” said Sunil Kavuri, a representative of FTXโs largest creditor group. However, he also emphasized that because repayments are locked at 2022 prices, creditors are not experiencing true recovery in terms of their crypto holdings.
Adding to the urgency, creditors will receive an additional 9% annual interest on their claims while they wait, meaning FTX must move quickly to distribute payments. According to Bloomberg, the full repayment process could take several months to complete.
