FTX Repayment Disclosure: Phase One Begins on February 18, Phase Two Expected in Q2

Detailed Arrangements for Repayment Phases

FTX has confirmed that the first phase of repayment will begin on February 18, 2025, with a total compensation amount ranging from $6.5 billion to $7 billion. The repayment will be calculated based on the price levels in November 2022. According to FTXs plan, the first phase primarily targets creditors with claims under $50,000.

Sunil, the representative of FTX creditors, disclosed that customers who do not meet the initial repayment criteria will be included in future distribution plans. These customers need to complete KYC (Know Your Customer), tax, and distributor requirements to be eligible for future distributions. The second phase of repayments is expected to commence in Q2 2025.

It is important to note that FTX will provide repayment in cash, not in the original cryptocurrencies. Although there are some procedural challenges for some creditors, they will be included in future distributions once all necessary requirements are fulfilled.

Phase Two Repayment Plan

Following the first phase of repayments, FTX plans to initiate the second phase of the repayment process. The second phase will focus on creditors with larger claims and will provide additional compensation to meet their needs. Creditors who did not meet the KYC, tax, or distributor requirements during the first phase will be eligible for compensation in the second phase. This phase is expected to involve larger amounts of compensation, ensuring fair repayment for those with higher claim amounts.

Additionally, FTX plans to offer time value compensation for creditors, which will be calculated at an annual rate of 9%, benefiting those whose investments have been held for a longer period. FTX has assured that all debts will be repaid in full, with interest, but shareholders will not receive any compensation from these repayments.

About FTX

FTX, founded in 2017 by Sam Bankman-Fried and his team, was one of the largest cryptocurrency exchanges globally. The platform attracted many investors with its innovative trading features, including derivatives and leveraged trading. However, in November 2022, FTX filed for bankruptcy due to financial instability and an inability to fulfill withdrawal requests from investors, leading to legal investigations of the companys management and founder.

FTX‘s bankruptcy case has drawn significant attention in the cryptocurrency industry. For many customers, this event not only caused financial losses but also exposed vulnerabilities in the cryptocurrency sector’s regulation and security. FTXs bankruptcy assets include cryptocurrencies like Bitcoin (BTC) and Solana (SOL), and with the increase in the prices of these assets, creditors will likely receive higher compensation.

FTXs restructuring plan is still in progress. While the compensation process has begun, there are still challenges to address. The company will continue working with creditors to ensure the smooth implementation of the repayment plan and seek to restore trust in the cryptocurrency industry through legal and regulatory channels.