TLDR
- FTX to begin repaying creditor claims over $50,000 starting May 30, 2025
- The estate has amassed $11.4 billion in cash for distributions
- Creditors will be paid based on November 2022 crypto prices, not current values
- Bitcoin has increased 500% since the petition date, leaving many creditors frustrated
- FTX is dealing with billions of fraudulent claims amid “27 quintillion” total submissions
FTX, the once-prominent cryptocurrency exchange that collapsed in November 2022, is preparing to begin repaying its major creditors on May 30, 2025.
The estate has accumulated $11.4 billion in cash to distribute to claimants with holdings valued over $50,000, marking a key milestone in the lengthy bankruptcy process.
The announcement comes more than two years after FTX’s dramatic implosion. The exchange, formerly led by Sam Bankman-Fried, filed for Chapter 11 bankruptcy protection in November 2022 following a liquidity crisis and revelations of fraud.
Smaller creditors, known as the “convenience class” with claims under $50,000, have already started receiving their payments. These distributions began in late 2024, shortly after the court approved FTX’s repayment plan in October of that year.
FTX’s bankruptcy attorney Andrew Dietderich confirmed the May repayment timeline in recent court proceedings. He also revealed that the company is facing what he described as “27 quintillion” total claims, with billions deemed fraudulent or questionable.
The sheer volume of disputed claims presents a challenge for the estate. Resolving these issues has become urgent because legitimate creditors are accruing 9% annual interest while they wait for their money.
CEO John Ray III, who previously managed Enron’s dissolution, has been leading FTX’s asset recovery efforts. His team has reclaimed between $14.7 billion and $16.5 billion in assets by selling stakes in tech companies, real estate holdings, and digital currencies.
The total recovered assets exceed FTX’s $11.2 billion in liabilities. This unusual surplus in a bankruptcy case means the court-approved restructuring plan guarantees creditors will receive approximately 118-119% of their claim values.
However, many creditors are upset about how their claims are being valued. The bankruptcy court ruled that all cryptocurrency claims would be valued as of the petition date, November 11, 2022, when prices were much lower than today.
Crypto Prices
Bitcoin was trading between $16,000 and $21,000 in November 2022. Since then, its price has increased by approximately 500%, while other cryptocurrencies have seen even larger gains.
Solana has increased by about 650% since the petition date. XRP has grown by roughly 450% during the same period, and even Ethereum has risen by nearly 47% despite recent price struggles.
“[The repayments] will definitely give closure to many affected by this horrendous ordeal,” said Sunil Kavuri, who represents the largest FTX creditor group. “But also, repayment is at petition date prices…so holders are not [at] full recovery in crypto terms.”
Some creditors have advocated for settlements in cryptocurrency rather than cash. They argue that being paid in cash based on 2022 values significantly reduces their real recovery, especially for those who would have held their crypto through the market upswing.
However, U.S. Bankruptcy Judge John Dorsey has enforced cash reimbursements based on the 2022 claim figures. Attempts to secure crypto-denominated repayments through litigation face dim prospects.
The repayment process could still take months to complete. Some jurisdictions remain excluded from the current distribution plan, including Russia, China, and Egypt, though the estate is reviewing options for these areas.
Despite the controversies, this resolution now ranks among the most substantial insolvency distributions ever recorded. About 98% of minor creditors have been compensated within two months of the plan’s activation.
FTX’s fall and subsequent bankruptcy process has fueled demands for clearer cryptocurrency regulations. The case highlights the need to balance investor protections with flexibility for innovation in the digital asset space.
