FTX is set to initiate the distribution of over $1.2 billion to creditors, marking a significant step in its bankruptcy proceedings.
FTX is set to initiate the distribution of over $1.2 billion to creditors, marking a significant step in its bankruptcy proceedings.
Users owed up to $50,000 in digital assets have until Jan. 20 to complete their repayment requirements, according to FTX’s restructuring plan, which was approved in October 2024.
The repayments are expected to follow the inauguration of U.S. President-elect Donald Trump on Jan. 20, which has led to speculation about potential regulatory clarity in the cryptocurrency market. Industry insiders believe this date could coincide with the proposed Bitcoin Act, aimed at establishing a Bitcoin reserve for the United States.
Following the bankruptcy filing in November 2022, FTX creditors have been eager for a resolution. The plan indicates that approximately 98% of users could receive 119% of their claimed funds.
However, some creditors have raised concerns over the repayment model, which values claims based on cryptocurrency prices at the time of bankruptcy. Since then, Bitcoin has surged by over 370%.
Experts predict varied reactions among investors. Anndy Lian, a blockchain expert, noted that smaller investors may opt to liquidate their assets for financial security, while others might hold out for long-term growth.
He referenced the Mt. Gox scenario, where most creditors chose to retain their Bitcoin despite significant price appreciation over the past decade.
Crypto firms BitGo and Kraken will aid in the distribution process. If all users file complete claims, the total expected payout could reach around $16 billion, presenting a potential liquidity event for the crypto industry.
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