FTX to begin investor payouts after 20 January
FTX to distribute $1.2 billion in user repayments, marking progress in restructuring efforts
FTX, the once-dominant cryptocurrency exchange, is set to distribute over $1.2 billion in repayments to users who have been locked out of their accounts since its bankruptcy over two years ago.
This milestone marks a significant development in the platform’s ongoing restructuring process, reports Cointelegraph.
Repayments Begin Post-January 20 Deadline
The exchange has outlined a January 20 deadline for users owed up to $50,000 to fulfill pre-distribution requirements. According to Sunil, a prominent FTX creditor and member of the 1,500-strong FTX Customer Ad-Hoc Committee, repayments are likely to commence shortly after this date.
“Repayments likely won’t start before Jan. 20,” Sunil noted in a recent update on X.
The timing coincides with the inauguration of U.S. President-elect Donald Trump, raising expectations for enhanced regulatory clarity and a possible nod to the Bitcoin Act—a proposal to establish a Bitcoin reserve for the United States.
FTX Repayment Model Sparks Mixed Reactions
FTX’s repayment plan, approved in October 2024, promises 98% of users repayment of up to 119% of their funds’ declared value at the time of bankruptcy. However, some creditors have criticized the model, as it bases repayments on cryptocurrency prices from November 2022. Since then, Bitcoin prices have surged over 370%, leading to disparities between the reimbursed value and the current market worth.
Despite the criticism, the repayment initiative is viewed as a vital step toward repairing industry trust after FTX’s collapse.
Potential Market Impact
The upcoming repayments may inject significant capital into the crypto market, potentially driving volatility. Industry watchers speculate that combined with the regulatory momentum from Trump’s inauguration, the repayments could catalyze the next phase of the crypto market cycle, with Bitcoin possibly reaching new highs above $200,000.
However, reactions among investors may vary based on individual risk tolerance. Blockchain expert Anndy Lian noted, “While repayments are crucial for rectifying past damages, market responses will depend on investor strategies and market conditions.”
Recently we wrote, that Backpack Exchange, a globally regulated cryptocurrency platform, has announced the acquisition of FTX EU, the European division of the now-defunct FTX, marking a significant step in its European expansion.
