FTX distributes $1.2B to creditors in recovery milestone

FTX Digital Markets, the Bahamian arm of the failed crypto exchange FTX (CRYPTO:FTT), initiated repayments of $1.2 billion to creditors on February 18, 2025.

The repayments mark a significant step in the recovery process following FTX's collapse, which triggered a crypto market downturn.

The initial payouts target creditors with claims of $50,000 or less.

The repayments began at 10 a.m. Eastern Time, prioritising approximately 162,000 claimants out of an estimated 460,000.

The $1.2 billion distribution is part of an expected total repayment of $16 billion.

According to FTX creditor Sunil, repayments were scheduled to commence at 3:00 p.m. UTC.

Payments are being facilitated through BitGo and Kraken, offering creditors the option to receive funds in stablecoins.

Claimants with approved amounts are receiving full reimbursements, plus 9% annual interest accrued since FTX filed for bankruptcy in November 2022.

These creditors are slated to receive roughly 119% of their adjudicated claim value.

Alvin Kan, chief operating officer at Bitget Wallet, suggested the repayments could positively impact the crypto market.

"A significant  be reinvested into cryptocurrencies, potentially impacting market liquidity and prices," Kan stated.

Some creditors have expressed frustration, as reimbursements are based on cryptocurrency prices at the time of bankruptcy.

“For retail investors, especially those without diversified portfolios, these repayments offer not just the return of funds but a sense of stability and peace of mind," stated Magdalena Hristova, public relations manager at Nexo.

Larger creditors with claims exceeding $50,000 are slated to begin receiving payments in the second quarter of 2025.

The bankruptcy process has focused on asset recovery and creditor repayment, with FTX’s estate liquidating holdings, selling assets, and reaching settlements to amass funds for distributions.

At the time of reporting, the FTX (FTT) price was $2.04.