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FTX Begins Repaying Creditors: A Milestone in Crypto's Darkest Hour

Coin WorldTuesday, Feb 4, 2025 2:23 pm ET

1min read

FTX, the once-thriving cryptocurrency exchange, is set to begin repaying creditors on February 18, marking a significant step in its ongoing bankruptcy proceedings. The Joint Official Liquidators (JOLs) of FTX Digital Markets Ltd. confirmed that creditors with approved Convenience Class claims, valued at $50,000 or less, will receive full repayment along with post-petition interest of 9% per annum.

The funds will be credited to verified BitGo accounts linked to the claimants’ registered email addresses, and a formal record of the payout calculations will be uploaded to the FTX Digital Claim Portal in the weeks following the distribution. Eligible claimants must confirm their BitGo account details through the portal before receiving their funds. The distribution will begin at 10:00 A.M. Eastern Time on February 18.

While the Convenience Class payout is a significant milestone in FTX’s bankruptcy proceedings, it does not resolve the larger claims that are still pending. Larger investors, including institutional firms and venture capital backers, are awaiting a resolution that remains subject to legal disputes and asset recovery efforts. The broader bankruptcy proceedings, led by FTX’s new management team under CEO John J. Ray III, have focused on asset recovery efforts, including legal action against former executives and third parties that allegedly benefited from the exchange’s mismanagement.

The upcoming distributions come as FTX seeks to finalize its liquidation plan and return funds to creditors. However, larger claims remain subject to more complex legal and financial considerations, with negotiations continuing over the final distribution of remaining assets.

Once one of the largest crypto exchanges in the world, FTX was valued at $32 billion before its sudden collapse in November 2022. The implosion was triggered by revelations that Alameda Research, a trading firm closely tied to FTX, had misused customer funds to cover its own losses. When customers rushed to withdraw their deposits, the exchange was unable to meet the demand, forcing it to halt withdrawals and file for bankruptcy.

The scandal sent shockwaves through the crypto industry, leading to criminal charges against FTX founder and former CEO Sam Bankman-Fried. In November 2023, he was convicted on multiple counts of fraud and conspiracy for misusing billions in customer assets. Other former FTX executives, including

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