FTX Begins Repayments: Bahamas Creditors to Receive Full Claims Plus Interest

FTX, the once-thriving cryptocurrency exchange, is set to commence repayments to its Bahamas-based creditors on February 18, 2025. This significant development comes nearly three years after the exchange's collapse, marking a crucial step in the aftermath of one of the crypto industry's most notorious bankruptcies.

The first wave of reimbursements will focus on claims valued at less than $50,000, categorized as "Convenience Class." Eligible creditors will receive 100% of their adjudicated claim value, plus 9% annual interest, calculated from November 11, 2022, through the payment date. The Joint Official Liquidators of FTX Digital Markets confirmed these details in an email sent to creditors.

BitGo, a leading crypto custody platform, will process the payments. While transactions may appear as pending up to 10 days before the distribution date, funds will become accessible starting February 18. The initial distribution applies only to creditors in the Bahamas liquidation process. Other former FTX users must wait until March 4 for their reimbursements, according to a creditor advocate.

The recovery process has faced legal challenges since FTX's bankruptcy filing in 2022, complicated by the appreciation in value of the lost crypto assets. The 9% post-petition interest addition aims to address financial gaps during the bankruptcy period.

FTX's collapse in 2022 was attributed to corporate mismanagement and fraud allegedly orchestrated by its founder, Sam Bankman-Fried. Investigations revealed a $16 billion shortfall, and reorganization administrators anticipate that asset recovery efforts could extend until 2027.

Bankman-Fried was convicted on multiple criminal charges, including fraud, and sentenced to 25 years in prison. He has since alleged judicial bias, requested a new trial, and his parents have reportedly sought a pardon from President Donald Trump. Members of his former inner circle, such as former Alameda Research CEO Caroline Ellison, received lighter sentences and forfeited wealth gained while working for FTX.