FTX Set to Begin Creditor Payouts Under $50K on February 18, 2025

17. Feb 2025 Posted by Bakshi A. on News

FTX has officially announced that it will commence creditor repayments for claims under $50,000 starting February 18, 2025. The exchange aims to complete the first wave of distributions within one to three business days.

This marks the initial stage of FTX’s Chapter 11 reorganization, focusing on what it calls “Convenience Class” claims. To facilitate payouts, the company has enlisted the services of BitGo and Kraken as distribution providers.

Repayment Structure and Calculation

FTX will calculate repayments based on the value of customer deposits as of November 2022, when Bitcoin hovered around $17,000. Eligible creditors will receive their original deposit amount plus 9% annual interest, irrespective of current crypto market prices.

John J. Ray III, Plan Administrator of the FTX Recovery Trust, hailed the milestone as a significant step in the long road to restitution. Over the past 28 months, the company has been working to recover assets and streamline the repayment process.

Steps for Creditors to Claim Funds

To receive funds, creditors must:

  • Log into the FTX Customer Portal
  • Complete Know Your Customer (KYC) verification
  • Submit necessary tax forms
  • Open an account with BitGo or Kraken

However, the process faces some challenges. Unverified claims exceed $345 million, and delays may occur for creditors who have yet to complete KYC verification. FTX has started sending email notifications with instructions to guide creditors through the process.

Additionally, creditors with transferred claims will only receive payments if their transferee holders have completed the necessary paperwork and a 21-day notice period without objections.

Security and Distribution Oversight

FTX has implemented strict security measures to protect creditors during the repayment process, warning users to watch for phishing scams. The company stresses that it will never request users to connect their wallets.

Customers who filed claims through FTX Digital Markets Ltd. will receive separate communications regarding their payouts. Future distribution dates for larger claims will be announced at a later stage.

Coordinated Effort Behind the Repayment Plan

FTX’s repayment plan involves multiple legal and financial professionals, including:

  • Sullivan & Cromwell LLP (legal counsel)
  • Alvarez & Marsal North America, LLC (financial advisor)
  • Perella Weinberg Partners LP, Quinn Emanuel Urquhart & Sullivan, LLP, and Landis Rath & Cobb LLP (additional advisory support)

Creditors can track updates and access court filings on the official bankruptcy portal and FTX’s support website.

What’s Next for FTX?

As FTX moves forward with its distribution efforts, it remains committed to recovering additional assets and ensuring all valid claims are processed under the approved plan. BitGo and Kraken have confirmed they are prepared to facilitate payments using their existing infrastructure.

With the long-awaited February 18 date approaching, smaller creditors will be the first to receive payouts, paving the way for larger claims to be addressed in the next phases.