FTX Victims Set to Recover $16.5B: What Creditors Need to Know About the Repayment Plan

The FTX bankruptcy saga, which sent shockwaves through the crypto industry two years ago, is nearing its resolution. A Delaware bankruptcy judge has approved a plan that will see FTX victims recover up to $16.5 billion in cash compensation. While this brings relief to many, some FTX customers are still dissatisfied, particularly those who missed out on potential crypto gains in the years following the exchange’s collapse.

So, when will victims be repaid, and how much will they get back? In this article, we’ll dive into the FTX repayment plan, explain how compensation will be distributed, and explore why some creditors remain unhappy despite the settlement.


FTX Creditors to Receive Up to $16.5 Billion in Compensation

The court-approved compensation plan aims to distribute up to $16.5 billion to FTX creditors, many of whom lost significant amounts of money when the exchange collapsed in 2022. The plan is expected to compensate nearly 119% of the cash value of the crypto deposits held by users when the platform went under.

1. How the Repayment Works

The repayment plan calculates the cash value of each creditor’s crypto holdings at the time of FTX’s collapse. At the time, Bitcoin was valued at around $20,000, while Ethereum traded at $1,200. However, with Bitcoin now sitting at approximately $65,000 and Ethereum at $2,400, many creditors feel they have lost out on the potential gains they could have earned had they not lost access to their funds.

2. Stablecoin Holders Least Affected

One group of creditors that will likely fare better are those who held stablecoins. Since stablecoins are pegged to the U.S. dollar, their value has not fluctuated as dramatically as that of other cryptocurrencies. This means stablecoin holders will receive the full cash value of their deposits without the losses that other crypto holders face due to market volatility.


Why Some FTX Creditors Are Unhappy With the Repayment Plan

While the approved repayment plan seems generous on the surface, it has left some FTX customers feeling shortchanged. The crux of their dissatisfaction lies in the significant gains that Bitcoin, Ethereum, and other cryptocurrencies have made since FTX’s downfall.

1. Missed Crypto Gains

When FTX collapsed in late 2022, Bitcoin was trading at around $20,000, but it has since climbed to $65,000. Similarly, Ethereum has doubled in value, going from $1,200 to $2,400. Holders of Solana (SOL) are even worse off, as Solana has risen seven-fold since the market crash tied to FTX’s implosion.

FTX customers are being reimbursed based on the value of their crypto holdings at the time of the collapse, meaning they miss out on the massive price appreciation in the years that followed. For some, the thought of receiving 119% of the cash value is scant consolation compared to what their crypto assets would be worth today had they not been locked out of the market.

2. Complex International Repayment Process

FTX was a global exchange, with users spanning over 200 jurisdictions. The global nature of its user base has complicated the repayment process. FTX’s restructuring chief, John Ray, noted that the estate is working on finalizing arrangements to distribute funds to creditors across these various regions. The complexity of the repayment process has led to delays and additional frustration among affected users.


When Will Creditors Get Their Money Back?

With the court’s approval in place, FTX creditors are now awaiting the effective date for the repayment plan to officially kick in. Once the effective date is confirmed, the process of disbursing funds to affected customers will begin.

1. The Timeline for Repayment

Though an exact repayment date hasn’t been set, it’s expected that the disbursement of funds will commence shortly after the effective date is announced. Customers who have already filed claims and provided identification documents will likely be among the first to receive their compensation.

2. What Creditors Need to Do

Many FTX creditors have already submitted claims during the bankruptcy proceedings. If you’re an FTX creditor, it’s crucial to ensure that you’ve:

  • Filed your claim on the FTX claims website.
  • Provided the necessary customer identification documents.
  • Reviewed your FTX balance as of the time the exchange went down.
  • Submitted any required tax forms to comply with the claims filing process.

Where the Repayment Funds Are Coming From

The repayment funds are sourced from the liquidation of FTX assets, including the recent $900 million sale of FTX’s stake in Anthropic, an AI startup backed by Amazon. These liquidated assets have been crucial in raising the funds needed to compensate creditors.

1. The Anthropic Sale

One of the biggest windfalls came from the sale of FTX’s stake in Anthropic, an AI startup that’s garnered significant attention for its advanced technologies. FTX’s $900 million stake in the company was sold off as part of the liquidation process, providing a substantial portion of the funds needed to pay back creditors.

2. Other Liquidated Assets

In addition to its stake in Anthropic, FTX has sold off various other assets, including stakes in businesses, properties, and cryptocurrencies that were held by the exchange. These sales have been essential in assembling the $16.5 billion needed for the repayment plan.


Conclusion: What FTX Creditors Can Expect Moving Forward

The FTX repayment plan brings a sense of closure to one of the most infamous events in the crypto industry’s history. With up to $16.5 billion set aside for creditors, many users will soon see compensation for their losses. However, the plan’s reliance on crypto values at the time of the collapse has left many investors feeling like they missed out on the considerable gains their assets could have earned.

As FTX creditors await the official disbursement date, it’s important to stay updated on the latest developments and ensure all necessary claims documents are in order. While this repayment plan offers some relief, the fallout from FTX’s collapse continues to serve as a sobering reminder of the risks inherent in the crypto industry.

For the global crypto community, the FTX saga is a clear warning about the need for greater transparency, regulation, and oversight moving forward.

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