- FTX will provide investors $5B in stablecoins by May 2025.
- Total claims are $11.745M, with recoveries at 123%-138%.
- The 2022 asset valuations used in payouts frustrate creditors.
By the 30th of May in 2025, creditors of the failed FTX cryptocurrency exchange will get stablecoins with a value of five billion dollars. Court approval of the plan allows the payout to be made to those who were hurt by the exchange’s failure. FTX was granted permission to repay its creditors with up to $16.5 billion from the assets it had recovered after getting approval from the United States Bankruptcy Judge John Dorsey in October of 2024.
The creditors as a whole have filed claims for $11.745 million. FTX anticipates that recoveries will be between $14.459 million and $16.254 million, giving investors a recovery rate of 123% to 138%. In February 2025, the company started by distributing $1.2 billion in BTC to token holders using platforms such as BitGo and Kraken.
Details of the $5B Stablecoin Distribution
The upcoming distribution of $5 billion will be made in stablecoins, which is a first in crypto bankruptcies. FTX has designed the repayment to respond to several groups of creditors. Information from Arkham Intelligence states that the first groups of users had less than $50,000 in claims, while those with higher claims were set to receive money in later phases. The number of creditors will be greater, and the expected funds for the whole settlement are set at $16 billion.
Also, Arkham Intelligence pointed out that wallets were being emptied, as payment was still happening. To ensure no fees are taken out of the payouts, Kraken awarded trading-fee credits to users who received the funds. Creditors who have claims that add up to more than $50,000 will be paid out from the second quarter in 2025 onward.
People have praised the bankruptcy plan as a clear way to guide complex Chapter 11 proceedings. Thanks to the recovered assets, most creditors will receive more than their initial payments, depending on the asset values when FTX failed.
Creditor Concerns Over Asset Valuation
Customers of FTX have expressed disappointment with how much they are getting back. The repayments are set according to the prices of their holdings in November 2022, when crypto was at a low point. At the time FTX collapsed, Bitcoin was worth $16,000, but its price has risen to more than $109,000. Because of this gap, creditors have not benefited from the growth in the market seen in the past two years.
When FTX failed in 2022, it resulted in billions of dollars in losses for customers, who reportedly lost $8 billion. The main reason for the exchange’s downfall was that customer money was used to fund Alameda Research, a sister trading company. It allows creditors to reclaim their losses and possibly place their money back into the capital market.
There may be more activity in the crypto world because of this payout. As more stablecoins worth $5 billion enter the market, liquidity is expected to go up. A number of creditors could choose to invest extra money in cryptocurrencies, which may encourage more action in the altcoin market.
