What You Need to Know:
- FTX has accumulated $11.4 billion in cash to repay creditors following its collapse in 2022.
- Payments to significant creditors are set to begin on May 30 as per court proceedings.
- A high volume of possibly fraudulent claims is yet to be addressed.
FTX, previously led by Sam Bankman-Fried, is preparing to start disbursements to key creditors by the end of May. The company has secured $11.4 billion to compensate various stakeholders impacted by its bankruptcy last year.
Payments will start on May 30, as reported in court by Bloomberg.
These disbursements will cover institutional investors and firms with cryptocurrency holdings on FTX’s platform. Some smaller creditors who have claims beneath $50,000 have already commenced their distributions.
The fallout from FTX’s collapse has been considerable, leaving creditors eager for restitution in crypto rather than fiat currency. Since the bankruptcy, Bitcoin prices have surged more than fourfold, further increasing the frustration among those waiting for reimbursement of their digital assets.
Difficulty in resolving FTX’s financial records is compounded by numerous claims that are largely unclear. Bankruptcy attorney Andrew Dietderich stated in court that FTX has received “27 quintillion” claims, many of which are duplicates or obviously fraudulent.
Interest payments add to the pressure of resolving these claims. While returns on FTX’s cash stock are modest, valid creditors are owed 9% interest annually on outstanding claims. The longer it takes to process payments, the greater the bills could grow.
