FTX Begins Paying Back Creditors, Recovery Could Reach $17 Billion
FTX suddenly went bankrupt for nearly three years, and FTX finally began to repay its creditors. The process begins on February 18, with the first spending claiming $50,000 or less from creditors. The group called the “convenience class” will receive full repayments, including 9% interest. Payments are expected to be received within one to three business days.
FTX starts creditor payment
Sold crypto exchange FTX works with BitGo and Kraken to handle the repayment process. according to Sunil KavaraThis is representative of the estate’s largest group of creditors, and the first round of payments will cover claims from about 162,000 of the approximately 460,000 creditors.
Meanwhile, in this 162,000 creditor claim, the creditor’s creditor’s claims include less than $50,000.
FTX plans to allocate a total of $17 billion, $7 billion allocated in the first phase. In November 2022, after the exchange went bankrupt, the repayment was followed by long-term legal proceedings.
What about creditors who owe more than $50,000?
Those who claim more than $50,000 will have to wait longer. Their repayment is scheduled to begin in the second quarter of 2025. The key date for viewing is April 11, when FTX will confirm claims over $50,000. The actual expenditure for the group is scheduled for May 30.
To obtain funds, the creditor must complete your Client (KYC) verification and submit the necessary tax form. If they missed the deadline, they are still eligible for a future release.
How much will creditors get?
FTX’s recovery rate estimates suggest that total spending could reach $14.46 billion to $16.25 billion. The average recovery rate is expected to be between 123% and 138%, meaning some creditors may even receive more than their original claims.
Although all guaranteed and client claims are expected to be fully covered, the exact recovery amount varies due to factors such as post-petition interest and mitigation fund recovery.
The impact of FTX on Solana (SOL) price
FTX’s bankruptcy also exists Influence the Solana (SOL) market. The exchange has been uninstalling its SOL holdings, increasing sales pressure. Last week, its liquidation wallet brought Sol tokens to Binance, driving lower prices.
Additionally, the upcoming 11.2 million sols that will be associated with FTX’s early investment will increase sales pressure.
As a result, the price of Sol fell 10% in a day, bringing it close to $160. As FTX continues to sell assets, the Solana market remains under pressure.
