FTX Digital Markets, the Bahamian arm of FTX, will begin repaying creditors who lost access to their funds when the cryptocurrency exchange collapsed in November 2022.
According to a Feb. 4 X post from FTX creditor Sunil Kavuri, FTX Digital Markets will begin distributing funds based on claims from “convenience class” creditors starting on Feb. 18. The distribution notice provided by Kavuri showed that FTX users claiming under $50,000 could expect “100% of [their] adjudicated claim value” as well as 9% interest per annum since November 2022.
Source: Sunil Kavuri
The distribution notice was based on a creditor who applied for recovery through the crypto firm BitGo. It’s unclear if Kraken, which will also assist in distributing FTX funds to claim holders, would have the same schedule. Assuming all FTX users file complete claims, the exchange could be expected to pay out more than $16 billion.
Related: LayerZero CEO announces settlement with FTX estate
After years in bankruptcy court and ongoing litigation to recover funds from crypto firms, FTX’s debtors announced that its reorganization plan took effect on Jan. 3. The initial group scheduled for reimbursement is expected to receive their funds by early March.
Final throes of the FTX saga?
Once one of the largest and most well-known cryptocurrency exchanges in the world, FTX’s popularity came to a screeching halt within a week in November 2022 when the firm reported a liquidity crisis and was forced to declare bankruptcy. Then-CEO Sam “SBF” Bankman-Fried resigned his position and was subsequently charged in the US and sentenced to 25 years in prison.
Kavuri said at SBF’s sentencing hearing that he had “suffered for two years” as a result of FTX’s collapse. Reports suggested he had lost more than $2 million when the exchange folded.
Criminal cases against four other former FTX and Alameda Research executives charged in the same indictment as Bankman-Fried were settled by the end of 2024. Former Alameda CEO Caroline Ellison and former FTX Digital Markets co-CEO Ryan Salame each received yearslong sentences, while a judge gave former FTX engineering director Nishad Singh and co-founder Gary Wang time served.
Magazine: Can you trust crypto exchanges after the collapse of FTX?