FTX creditors start receiving payouts after three years, with the repayment process starting last February 18, only prioritizing small claims.
First Repayments Underway for Claims Below $50K
The FTX estate has officially begun distributing $13 billion to creditors, nearly three years after the exchange’s collapse. The repayment process, which started on February 18, prioritizes “small claims” under $50,000, benefiting approximately 162,000 claimants.
Initial Payouts Totaling $800M
According to Sunil Kavara, a representative of FTX’s largest creditor group, the first phase of payments will distribute $800 million out of a possible $1.2 billion for small claims. The payouts are split evenly between original FTX users and claim buyers.
Kraken and BitGo Assisting in Reimbursements
FTX’s repayment partners, Kraken and BitGo, are facilitating the process, with creditors having the option to receive their claims in stablecoins.
FTX’s Collapse and Legal Fallout
Founded by Sam Bankman-Fried (SBF) in 2019, FTX was once a dominant crypto exchange before its 2022 collapse due to financial mismanagement. Following the bankruptcy, SBF was arrested, extradited to the U.S., and sentenced to 25 years in prison for fraud. Despite his conviction, Bankman-Fried continues to fight legal battles, including an appeal for a presidential pardon. As repayments continue, the crypto industry watches closely to see how much FTX creditors will ultimately recover.
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