FTX announces next repayment round for May
FTX has announced plans for upcoming repayments to creditors of the bankrupted crypto exchange after initiating its first round of reimbursements on Feb. 18.
According to a Feb. 18 announcement, the next repayment distribution will take place on May 30 for holders of allowed claims of “Class 5 Customer Entitlement Claims and Class 6 General Unsecured Claims.” It includes customers who had assets on the platform when it collapsed and other creditors, such as vendors and trading partners.
FTX’s next repayment round requires creditors to have verified claims by April 11 — the record date to qualify for distribution.
According to Sunil Kavuri, an FTX creditor and advocate, the round of repayments starting in May will include claims for a value above $50,000. These creditors will need to choose a distribution agent by April 11, Kavuri added.
Under FTX’s recovery plan, 98% of creditors are expected to receive at least 118% of their claim value in cash. In May 2024, the exchange estimated the distribution’s total value to range between $14.5 billion and $16.3 billion.
Source: Sunil Kavuri
Related: FTX creditors speak on plans, lessons learned as repayments start
Currently, crypto exchanges Kraken and BitGo are the two entities facilitating the repayments . In order to participate in the distribution, creditors must complete Know Your Customer verification, submit the required tax forms, and onboard with BitGo or Kraken.
FTX also warned users of potential phishing emails posing as official communications.
The FTX repayments started on Feb. 18 for the group known as “Convenience Class” — creditors with claims up to $50,000. These creditors are expected to receive repayments in one to three business days, FTX said.
“FTX appreciates our customers and creditors’ patience and collaboration throughout this complicated process,” John J. Ray III, plan administrator of the FTX Recovery Trust, said in a statement. “Our work is not over — we intend to continue our recovery efforts and returning funds to additional claim classes.”
Crypto markets are closely monitoring potential impacts on token prices as the exchange distributes billions of dollars to former users. At the time of writing, the market has fallen 2.1% in the past 24 hours, with Bitcoin ( BTC ), Ether ( ETH ), XRP ( XRP ), BNB ( BNB ) and SOL ( SOL ) all sliding. Many creditors have sold their claims over the past two years.
FTX creditor advocate Mr. Purple, who Cointelegraph interviewed regarding his thoughts on FTX creditors, noted that many claimants may be hesitant to invest in crypto due to the traumatizing nature of the bankruptcy and the need for liquidity after being without funds for two and a half years.
Related: FTX’s $1.2B repayments mark key moment in crypto industry recovery
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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