FTX Repayment Begins

The FTX estate kicked off creditor repayments on February 18 at 10 a.m. Eastern Time, nearly three years after the crypto exchange collapsed.

FTX began distributing funds to creditors, 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.

Key Details

• Date of First Distribution: February 18, 2025, 10 a.m. ET
• Total Claims < $50k: $1.2 billion (120.5%)
• Approximate Payment: $800 million out of $1.2 billion
• Claims Covered: ~162,000 out of 460,000 estimated allowable claims
• Original Holders: $400 million
• Claim Buyers: $400 million

FTX was founded in May 2019 by former crypto tycoon Sam Bankman-Fried (SBF). By 2021, it was one of the largest digital asset exchanges, rivaling Binance and Coinbase.

SBF’s empire unraveled in late 2022 after reports revealed significant discrepancies in FTX’s balance sheet. The controversy led to the exchange filing for Chapter 11 bankruptcy.

Shortly thereafter, authorities in the Bahamas arrested Bankman-Fried and extradited him to Manhattan. A judge sentenced SBF to 25 years in prison for fraud and other charges. He has since claimed judicial bias and requested a new trial, while his parents reportedly sought a Presidential pardon from Donald Trump’s office.

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