Outside Source
The FTX estate kicked off creditor repayments on Feb. 18 at 10 a.m. Eastern Time, nearly three years after the crypto exchange collapsed.
FTX began distributing funds to creditors this week, starting with “small claims” of less than $50,000, according to Sunil Kavara, a representative of the estate’s largest creditor group.
In October 2024, a U.S. bankruptcy judge approved FTX’s reorganization plans following years of court proceedings. BitGo and Kraken were chosen as repayment partners, while the court ruled that creditors could receive payments in stablecoins if they wished.
The first phase of reimbursements will pay out $800 million of a possible $1.2 billion, Kavara said. FTX plans to distribute about $13 billion in total to creditors, but the estate aims to retain around half of that allocation to service disputed claims.
According to Kavara, the small claims repayments comprise $400 million owed to original users of the defunct crypto exchange, with claim buyers accounting for the other half.
This initial repayment exercise covers approximately 162,000 claims out of an estimated 460,000 potential claimants. The process includes payments to Bahamas-based users as well, as previously reported.
FTX was founded in May 2019 by former crypto tycoon Sam Bankman-Fried, also known as SBF. By 2021, Bankman-Fried’s startup was one of the largest digital asset exchanges and was seen as a rival to Changpeng Zhao’s Binance and U.S.-based Coinbase.
SBF’s empire unraveled in late 2022 after media reports revealed significant discrepancies in FTX’s balance sheet. The ensuing controversy crippled Bankman-Fried’s operations, leading the exchange to file for Chapter 11 bankruptcy.
Shortly after, authorities in the Bahamas, where FTX was based, arrested Bankman-Fried and extradited him to Manhattan.
A judge sentenced SBF to 25 years in prison for fraud and other criminal charges following a brief trial. Bankman-Fried has argued judicial bias and requested a new court battle. His parents have also reportedly explored a Presidential pardon from Donald Trump’s office.
This article first appeared at crypto.news
