FTX Digital Markets, the Bahamian branch of the collapsed cryptocurrency exchange FTX, will begin repaying its first group of creditors on February 18, 2025. This repayment system is a part of FTX’s ongoing bankruptcy process, which began after its $9 billion collapse in November 2022. The fall of FTX caused the longest-ever crypto winter, during which Bitcoin’s price dropped from $67,000 to $16,000.
FTX’s First Repayments Focus on Smaller Creditors
FTX’s Bahamas branch will repay users with claims of $50,000 or less in the first round of payments. These repayments will begin at 3:00 PM UTC on February 18, 2025, according to a post on X by Sunil, a member of the FTX Customer Ad-Hoc Committee, which represents over 1,500 FTX creditors.
FTX creditor received an email confirmation of repayment. Source: XThis initial payout will distribute approximately $1.2 billion to affected FTX customers. The payments are part of FTX’s reorganization plan, which aims to compensate users who lost funds when the exchange collapsed.
Experts See Repayments as a Sign of Market Recovery
Some investors said that the $1.2 billion repayments could be a positive sign for the crypto market. They believe some of the recovered funds may be reinvested into cryptocurrencies, which could increase market liquidity and influence prices.
Investors think that a portion of FTX repayment will flow back into the crypto market. Source: XUsers believe that this new liquidity could increase market activity and improve prices, helping the industry recover from the FTX crisis.
However, some investors may feel disappointed because repayments are based on crypto prices from November 2022. This is when FTX declared bankruptcy. At that time, cryptocurrency prices were much lower than they are today. For example, Bitcoin (BTC) was worth around $16,000 in November 2022. Today, it trades near $98,000, marking a 370% increase. Similarly, Ethereum price was $2,500 during the collapse, now trades around $2,698.
This pricing model could leave some creditors feeling shortchanged, even though they are receiving full repayments according to bankruptcy rules. Still, he believes the repayments could restore investor confidence by showing that the market is moving forward after the FTX collapse.
Will Investors Really Reinvest in Crypto?
While the $1.2 billion repayment is a significant event for FTX creditors, it may not cause a major shift in the broader cryptocurrency market. This initial payout is unlikely to move markets because it is limited to creditors with claims under $50,000. Sunil explained that many of these smaller creditors may choose to save their repayments or invest in traditional assets rather than return to the volatile crypto market.
Majority of FTX creditors want to use the money to buy a house, real assets rather than reinvesting in crypto market again. Source: XLarger FTX Creditors Still Waiting for Repayment Plans
The Feb. 18 repayments mark the first phase of FTX’s creditor repayment process. While smaller creditors are receiving their funds, larger creditors—those with claims over $50,000—are still waiting for updates on their payments. FTX has said that additional details about repayments to larger creditors will be announced in the coming months.
Under the reorganization plan, FTX will distribute between $14.7 billion and $16.5 billion in total, with $7 billion allocated for the first phase. Payments for larger claims will begin in the second quarter of 2025.
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