Crypto company FTX, which went bankrupt in November 2022, plans to start repayments to its main creditors by the end of May 2025 using the funds collected after its shutdown.
1st Payment to Main Creditors on May 30
According to recent Bloomberg reports, FTX will begin repayments to its main creditors on May 30. Bankruptcy attorney Andrew Dietderich, who oversees the Chapter 11 case, stated that the main creditors include investors owed millions and institutions with crypto held on FTX. The repayment process is expected to be lengthy due to the large number of claims filed.
Billions of Flawed Claims
Many of the claims are questionable, as some may conflict with KYC rules requiring creditor identity verification. Some claims may involve unjustified financial demands, as noted by the lawyer. Official reports indicate that FTX faces billions of flawed claims while the total creditor claims are around '27 quintillion.' In such cases, numerous duplicate, inflated, and false claims are usually eliminated by lawyers following court-approved payout plans.
Fastest Payments to Legit Creditors
FTX needs to pay legit creditors as swiftly as possible because the interest rate on its $11.4 billion cash is lower than the 9% rate that creditors earn while awaiting repayments. Additionally, it should be noted that Bitcoin's price has significantly risen since 2022. In November of that year, BTC traded around $20,000, and now it is priced above $81,000, which upsets many creditors who expected payments in digital assets instead of dollars.
FTX, which encountered significant challenges after its 2022 shutdown, is now taking essential steps to begin compensating its creditors. While issues with flawed claims persist, the company strives to swiftly settle all legitimate claims.
