TLDR
- FTX to begin repayments to Bahamas creditors on February 18, 2025
- ETH holders will receive $2,500 per ETH based on November 2022 prices
- BTC holders limited to $20,000 per Bitcoin despite current $97,988 value
- FTX has $13 billion in payout reserves but plans to withhold half for disputed claims
- Repayments follow Sam Bankman-Fried’s 25-year prison sentence for fraud
The long-awaited repayment process for FTX’s Bahamas creditors is set to begin on February 18, 2025, with Ethereum holders positioned to receive $2,500 per ETH while Bitcoin claims face a $20,000 cap based on November 2022 prices.
BitGo will handle the distribution of funds to creditors, following the reorganization plans that became effective on January 3. The plan requires all creditor repayments to be processed within 60 days of the effective date.
Court documents reveal that FTX has approximately $13 billion set aside for payouts. However, the exchange plans to withhold 50% of this amount for disputed claims, leaving uncertainty about the exact amount available for Bahamas creditor repayments.
The repayment structure has created a stark contrast between Bitcoin and Ethereum holders. Bitcoin’s current market price of $97,988 stands nearly five times higher than the November 2022 repayment rate of $20,000, affecting 98% of users who held Bitcoin on the platform.
Ethereum holders face a smaller disparity, with current market prices at $2,698 compared to the $2,500 repayment rate. This relatively modest difference has sparked discussions on social media platforms about Ethereum’s price stability over the past two years compared to Bitcoin’s dramatic rise.
The decision to base repayments on November 2022 prices means creditors cannot benefit from the current crypto market conditions. This policy has drawn criticism from some traders, with one user on X demanding, “They should have to pay market value at time of payout!!”
The repayment process marks another chapter in the aftermath of FTX’s collapse in 2022. The cryptocurrency exchange’s downfall led to extensive investigations that uncovered widespread corporate mismanagement and fraud.
These investigations culminated in the conviction of FTX founder Sam Bankman-Fried on multiple criminal charges. The former CEO received a 25-year prison sentence for his role in the platform’s collapse.
The compensation structure affects different user groups differently. While some creditors will receive full repayment of their claims, including interest, the November 2022 price cap creates varying outcomes depending on which cryptocurrency users held on the platform.
FTX’s estate has established clear guidelines for the repayment process, working with BitGo to ensure proper distribution of funds. This partnership aims to provide a structured approach to compensating affected users.
The repayment plan represents a major step in resolving outstanding claims against the bankrupt exchange. For many creditors, this marks their first opportunity to recover funds locked since FTX’s bankruptcy in 2022.
Social media reactions highlight the complex nature of the repayment structure. Users have expressed mixed feelings about the compensation plan, particularly regarding the differences between Bitcoin and Ethereum holder outcomes.
The price disparity between repayment rates and current market values underscores the challenges of managing cryptocurrency bankruptcy cases. The time gap between the exchange’s collapse and the start of repayments has created unforeseen consequences for different groups of creditors.
The February 18 start date initiates a carefully planned distribution process. BitGo’s involvement provides a regulated framework for managing the complex task of returning funds to qualifying creditors.
Court filings indicate that while $13 billion has been designated for payouts, the decision to reserve half for disputed claims reflects the ongoing complexity of resolving all outstanding issues related to FTX’s collapse.
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