FTX, 27 months following the exchange's dramatic collapse in early November 2022, is set to begin repaying claims worth more than $50,000 on May 30, moving the long and controversial bankruptcy process one step closer to its end.
Bankruptcy attorney Andrew Dietderich said the company, currently helmed by CEO John Ray III, would make its first repayments to major creditors at the end of May from its stockpile of $11.4 billion in cash, Bloomberg recently reported. Dietderich also claimed the defunct exchange faces "27 quintillion" claims, with billions of fraudulent or specious claims, according to the report.
Some "convenience class" creditors have already received repayments, with digital currency claims valued as of FTX's bankruptcy petition date, November 11, 2022. Though FTX has estimated that creditors will receive 118% of their claims back in cash, some creditors feel the statistic is misleading, given the increases in the price of many digital assets since the petition date.
Solana, one of the best-performing tokens over the time period, has increased by about 650% since the petition date, while XRP has increased by about 450%, and BTC has grown 500%. Even Ethereum, despite its recent price struggles, has grown nearly 47%. Yet creditors will be repaid based on the value of their holdings before the price increases of the past two years.
"[The repayments] will definitely give closure to many affected by this horrendous ordeal," said Sunil Kavuri, a representative of the largest FTX creditor group. "But also, repayment is at petition date prices...so holders are not [at] full recovery in crypto terms," Kavuri added.
Creditors will earn an additional 9% annual rate on their claims while they wait for repayment, meaning FTX faces a race against the clock to repay claims, a process which could take months, according to the Bloomberg report.
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