FTX to Begin Creditor Payouts in May After Recovering $11.4B

FTX, the bankrupt crypto exchange formerly led by Sam Bankman-Fried, is set to begin repaying major creditors by May 30, according to recent court proceedings in Delaware. The company has secured $11.4 billion in cash to distribute among thousands affected by its dramatic 2022 collapse.

Creditors include institutional investors and firms that held crypto assets on FTX’s platform. Some smaller creditors with claims under $50,000 have already received partial repayments. However, many creditors remain frustrated, especially as Bitcoin prices have soared more than fourfold since FTX filed for bankruptcy. Many expected repayment in crypto rather than in cash, leading to concerns over lost potential value.

FTX’s bankruptcy proceedings have been slowed by an overwhelming number of claims—many of which are duplicates or fraudulent. Andrew Dietderich, an attorney representing FTX, noted the company has received an astonishing “27 quintillion” claims, highlighting the scale of confusion and complexity.

To make matters more urgent, interest continues to accrue on valid claims. While FTX earns limited returns on its holdings, it owes creditors up to 9% annually on unpaid amounts. The longer repayments are delayed, the more the exchange could owe.

FTX’s planned repayments mark a significant step forward in the ongoing recovery process. While many affected parties remain disappointed with the repayment method, the upcoming distributions offer long-awaited relief.