FTX Begins Repayments: $1.2B to Smallest Claims
1min read FTX, the once-thriving cryptocurrency exchange, has initiated the repayment process for users with claims worth $50,000 or less. The first phase of compensation, targeting the 'convenience class' of claims, is expected to distribute approximately $1.2 billion through intermediaries BitGo and Kraken.
Kraken, one of the intermediaries, has already processed funds for over 46,000 creditors, with BitGo confirming it is also processing the funds, which should reflect within the next 72 hours. Most of the first phase of claims are entitled to about 118% in accrued interest. However, it is important to note that the repayments will be in USD, not in the form of crypto assets held by victims at the time of FTX's bankruptcy.
The compensation will be based on the value of the assets in November 2022, when the crypto market was experiencing a significant downturn. During this period, Solana (SOL) was valued at around $8, Bitcoin (BTC) at about $16,000, and Ethereum (ETH) traded at around $1,200.
The second phase of repayment, targeting claims worth over $50,000, is expected to begin on May 30th. FTX Recovery Trust administrator John J. Ray III has stated that the process is ongoing, and they intend to continue their recovery efforts to return funds to additional claim classes. The total expected distribution to FTX creditors by the end of the exercise is approximately $16 billion to $17 billion.
In a separate gesture, Binance founder CZ has pledged to make donations to users who lost money in TST and Broccoli memecoins. However, he clarified that this is not an endorsement of the tokens. Meanwhile, the FTT token, the native token of the defunct FTX exchange, was valued at $2, down 5% on the day amid broader bearish pressure in the market.
