FTX to Start Paying Creditors in May After Long Bankruptcy Case
- FTX, The failed crypto exchange will start paying creditors on May 30, distributing about $11.4 billion after months of legal battles.
- A large number of claims has caused delays in payout, and with the consistent rise in Bitcoins price, creditors prefer crypto repayments over cash.
- BitGo and Kraken are helping with repayments, and total recoveries could reach $16 billion if all claims are processed.
FTX, the failed cryptocurrency exchange platform that shook the crypto industry in 2022, would start repaying creditors from May 30. After several months of legal disputes and financial battles, the exchange has been able to raise $11.4 billion to make significant payments to old customers. This marks a big step in its long bankruptcy process.
According to Bloomberg, the court hearings in Delaware confirmed that the exchange, which was led by Sam Bankman-Fried, would settle debts with its main creditors by the end of May.
FTX Repayment Challenges
FTXs collapse in 2022 left many creditors uncertain about recovering their money back. Faster settlements could have helped increase creditors yield more returns on their money; the sheer volume of claims has caused delays. Smaller creditors with convenience claims have already received their funds; larger debt holders would be paid from May 30.
The lawyer in charge of the bankruptcy case, Andrew Dietderich, informed the judge handling the Chapter 11 case that repayments will go to investors and institutions that are owed over $50,000. The situation is more frustrating as Bitcoins price has surged over four times since the exchange went under the raider, leaving former users wishing for repayments in crypto rather than cash, costing the exchange more than they owe.
Other Exchanges To Help with FTX Repayments
Crypto exchanges like BitGo and Kraken have joined efforts to help with FTXs repayments. If all eligible users submit their claims, the total recoveries could reach $16 billion. Earlier this year, Backpack Exchange, which is founded by former FTX and Alameda Research employees, stated it had officially acquired FTX EU, the European branch of the collapsed exchange.
However, the exchange denied this claim, saying that Delawares US Bankruptcy Court has not yet approved the deal. In the US, the Justice Department is working to recover up to $13.25 million in political donations linked to former FTX executives, according to a recent court filing.
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Text source: TronWeekly
