Crypto: FTX Triggers Its Repayment Plan

The victims of the FTX bankruptcy finally see the light at the end of the tunnel. The crypto exchange platform officially activated its repayment plan on January 3, 2024, paving the way for the return of funds for millions of wronged users.

An FTX repayment process finally clarified

The first reimbursements are expected to occur within 60 days for creditors claiming less than $50,000, according to the approved reorganization plan by the court.

BitGo and Kraken, two major players in the crypto industry, will oversee the distribution of funds, estimated at around $16 billion. The plan includes a particularly favorable repayment, as 98% of users could recover up to 119% of the declared value of their assets.

Eligible creditors must have submitted their claims via the official FTX platform. The administrator warns against phishing attempts, as many fraudulent emails posing as FTX are already circulating.

This repayment phase marks the culmination of a bankruptcy process that lasted over a year, since the spectacular collapse of FTX in November 2022.

Contests persist despite the progress of the case

The method of calculating reimbursements is, however, controversial. Creditors will receive the equivalent of their assets valued at November 2022 prices, ignoring the significant rise in the crypto market since then.

Bitcoin has shown an increase of over 400% since the bankruptcy to nearly $100,000. This spectacular rise has led many users to denounce a calculation method that penalizes them.

This frustration adds to the trauma caused by revelations about FTX’s fraudulent management. Sam Bankman-Fried, former CEO, has been sentenced to a lengthy prison term, as have Caroline Ellison and Ryan Salame. Only Nishad Singh and Gary Wang, also involved in the scandal, have avoided incarceration.

Although no user has yet confirmed receiving their funds, this repayment plan represents a crucial step towards resolving one of the largest debacles in cryptocurrency history.