Crypto News Today: FTX to Initiate Repayments for Creditors with Claims Under $50,000 on February 18

FTX, the beleaguered cryptocurrency exchange, is set to commence repayments to creditors holding claims below $50,000 starting February 18, 2025. This move is part of FTX's broader reorganization plan aimed at addressing the financial fallout from its 2022 collapse.

Repayment Details 

The repayment amounts will be based on the value of customer deposits as of November 2022, when Bitcoin was trading around $17,000. Given Bitcoin's significant appreciation since then, currently hovering near $100,000, creditors will not benefit from the subsequent gains in cryptocurrency value. For instance, a deposit valued at $50,000 in November 2022 would be worth approximately $295,000 today, but creditors will receive only the original deposit amount plus 9% annual interest.

Distribution Process

To facilitate secure and efficient fund distribution, FTX has partnered with BitGo, a leading digital asset custody and security firm. BitGo's advanced infrastructure is expected to ensure a smooth transfer and management of funds, minimizing potential delays or errors in the repayment process.

Communication with Creditors

FTX has begun notifying eligible creditors via email, providing guidance on the repayment process. Creditors are advised to complete necessary procedures, including Know Your Customer (KYC) verification, to facilitate timely payments. It's important to note that creditors who have not completed KYC procedures account for approximately $345 million in claims.

Future Repayments and Considerations

Following the initial repayments to creditors with claims under $50,000, FTX plans to address larger claims in subsequent phases. The company has outlined a phased approach to debt repayment, prioritizing smaller claims initially, with subsequent repayments to be announced as the process unfolds.