FTX has announced the commencement of repayments to its Bahamas-based creditors, set for February 2025. Key details of the compensation plan involve fixed return rates for Bitcoin and Ethereum holders.
FTX Repayment Details
Under the plan, Ethereum holders will receive $2,500 per ETH, while Bitcoin claims are capped at $20,000. These figures are based on November 2022 prices. This has sparked frustration among investors, particularly Bitcoin holders, as the current market has seen substantial growth. Ethereum's price at $2,698 eases the blow for ETH investors.
Analyst Reactions: Program Surprises
Crypto analyst @Ren_gmi highlighted that FTX aims to return between $14.7 billion and $16.5 billion, potentially paying creditors over 118% of their original account values from November 2022. Despite this large amount, less than $3B is expected to return to the crypto market. Initially, bankruptcy claims were sold at low values, but as more assets were recovered, the claims' value surged. Crypto holders may still face losses in terms of actual coins.
Bitcoin vs. Ethereum: Who's Better Off?
For Bitcoin holders, the repayment cap feels like a hard hit, given BTC’s explosive growth. Ethereum holders face a milder impact due to the minimal price difference. This has fueled debates on the fairness of the repayments, with calls for valuations to reflect current market prices. FTX’s repayment process is critical in closing the chapter on one of crypto’s biggest collapses.
Despite the controversies and dissatisfaction, FTX's repayment program is a significant step towards resolving the aftermath of the 2022 financial crisis. This event raises questions about future approaches to investor compensation amid market volatility.
