FTX Creditor Repayments Begin: Here are the Details

The long-awaited repayment process for creditors since the collapse of FTX finally begins today. The first distribution will reportedly cover approximately $1.2 billion worth of payments for claims under $50,000. This will allow creditors to recover 119% of their investment. However, some $345 million has yet to go through the KYC process.

Repayments for larger creditors are expected to begin in the second quarter of 2025. In total, more than $17 billion is planned to be paid for claims over $50,000. Of this, $7 billion is expected to be distributed in the first phase.

Possible Effects of Refunds on the Crypto Market

FTX refunds could have a significant impact on the Bitcoin and altcoin market in particular. Around $800 million is expected to enter the market in the first payments:

• $400 million is expected to go to funds buying creditor claims, which are unlikely to invest in crypto.
• Another $400 million will go to the original creditors. However, there is no guarantee that these investors will redirect all their money back into crypto.

Therefore, despite a significant inflow of liquidity into the market, it may not trigger a sudden surge in Bitcoin and altcoins. Especially if a large portion of the incoming funds are converted into fiat money, the redemptions may have a neutral or slightly downward impact on prices.

A Brief Overview of the FTX Crash

FTX filed for bankruptcy in November 2022 amid a major liquidity crisis and accusations of financial irregularities. It was revealed that the company had used client assets in risky investments through Alameda Research. This resulted in investors being unable to withdraw their funds and the FTX ecosystem quickly collapsed.

It is estimated that around $8 billion of client funds were lost during FTX’s bankruptcy process. Former CEO Sam Bankman-Fried and senior executives were indicted for fraud and financial crimes.

How Will the Redemption Process Work?

The management of the redemption process is handled by official liquidators appointed by FTX Digital Markets Ltd. Payments will be made via secure wallets integrated with BitGo.

Creditors who wish to receive payments:

1. Login to the FTX Refund Portal and verify their accounts.
2. They must complete KYC processes and verify their identity.
3. They are expected to check and confirm the details of the payments they request.
4. They need to verify the wallet addresses from which they will receive payments.

Payment Dates:

• February 18, 2025: First payments for claims under $50,000.
• Q2 2025: $7 billion is planned to be paid in the first phase for claims over $50,000.

How Will the Refund Process Affect the Crypto Market?

According to crypto experts, the impact of these refunds on Bitcoin and altcoins could be complex.

⇒ Positive Impact on Crypto:

• Some investors who receive their refunds may redirect these funds back to Bitcoin and altcoins.
• Since there will be a large liquidity inflow to the crypto market, volumes may increase.

⇒ Negative Impact on Crypto:

• A significant portion of the refunds could be converted into fiat money, which could create a huge selling pressure.
• Bitcoin price volatility may increase, as some large investors may sell Bitcoin to take profits.

As a result, FTX refunds may lead to short-term fluctuations in the crypto market. However, investor psychology in the market and creditors’ confidence in crypto will be one of the key factors determining the direction of prices.

How to Claim FTX Refunds?

FTX creditors can follow the steps below to receive their refunds starting February 18, 2025:

Log in to the FTX Claims Portal:

• Go to claims.ftx.com and log in with your old FTX email address.

Upload Required Documents:

• Attach documents showing your account balance and transaction history.
• Upload passport or ID document for identity verification.

Confirm Your Request:

• After checking the amount, confirm your request and submit it.

Follow the Process:

• Check the portal weekly to track the status of your payment.

Payment Method:

• Claims under $50,000 will be paid at 119%.
• Payments will be made to BitGo wallets and can be converted to fiat or crypto.

It is important to follow the official announcements so as not to miss the application process.

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