FTX will initiate payments to its creditors in the Bahamas starting February 18, 2025, marking a critical step in its court-approved reorganization plan. The first phase of reimbursements will cover claims valued at $50,000 or less, with payments processed through BitGo, a crypto custody platform overseeing the distribution of recovered funds.
This repayment process, approved in October 2024 and effective from January 3, 2025, is part of FTX’s broader strategy to address its financial obligations following its collapse in November 2022. The company has recovered up to $16.5 billion in assets earmarked for creditor distribution. Approximately 98% of eligible creditors in this initial phase are based in the Bahamas.
Other FTX creditors outside the Bahamas will start receiving payments on March 4, 2025. All eligible creditors are set to receive 9% annual interest on lost assets, calculated from the date of FTX’s bankruptcy. The repayment process involves a structured four-step system: logging into the claims portal, completing KYC verification, submitting tax forms, and registering with Kraken or BitGo for payment processing.
While creditors are expected to recover 118% of their claim value in USD, these figures are based on crypto prices from November 2022, potentially affecting the real value of distributed funds due to market fluctuations. Creditors who did not meet pre-distribution requirements by January 20, 2025, may experience delays, and ongoing legal discussions with the U.S. Department of Justice over $1 billion in seized funds could further impact the payout timeline.
In related developments, FTX Debtors confirmed a settlement with K5 Global to aid in asset recovery. Although financial details remain undisclosed, the agreement is expected to enhance returns for FTX stakeholders. “This settlement represents a positive step in our recovery efforts,” said FTX CEO John Ray III.
Additionally, FTX has settled a legal dispute with LayerZero concerning transactions linked to Alameda Research before FTX’s collapse. LayerZero CEO Bryan Pellegrino stated, “The fight was ultimately about creditor recoveries, not against FTX itself.”
Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by Harshajit Sarmah.
