FTX Begins Long-Awaited Refunds: $800 Million Already Distributed
After more than two years of anticipation, the long-awaited refunds from FTX officially began on February 18, 2025, at 15:00 UTC. In the first wave of distributions, $800 million has already been paid out to 162,000 accounts, marking a significant milestone in the bankruptcy proceedings of the once-prominent cryptocurrency exchange. Many users have confirmed receiving their funds through the Kraken platform.
FTX Starts Repaying Its Creditors
FTX Digital Markets, the Bahamas-based subsidiary of the bankrupt exchange, has initiated its first phase of creditor repayments as scheduled. Out of the $1.2 billion allocated for this initial round, a substantial portion has already been distributed to affected users.
Kraken, the exchange platform designated by FTX for handling these payouts, is currently processing the transactions. Numerous users have reported successful receipt of their funds. Sunil, a representative of the FTX Customer Ad-Hoc Committee, which advocates for over 1,500 creditors, clarified that this first phase is limited to creditors with claims of less than $50,000.
These refunds mark a crucial step in resolving the fallout from FTX’s spectacular collapse, which led to an estimated $9 billion in losses. The exchange’s bankruptcy, along with that of its 130 subsidiaries, triggered a domino effect throughout the industry, plunging the cryptocurrency market into one of its most severe “crypto winters.” At its lowest point, Bitcoin fell to $16,000—a stark contrast to its current valuation.
Impact on the Cryptocurrency Market
Alvin Kan, operations director at Bitget Wallet, believes the release of funds will have a noticeable impact on the market. “Investors will likely reinvest a large portion of the $1.2 billion into cryptocurrencies, which will boost market liquidity and influence the prices of digital assets,” he stated.
Controversy Over Refund Calculations
Despite the relief that repayments bring, the method used to calculate the refunds has sparked criticism within the crypto community. FTX is reimbursing creditors based on asset prices from November 2022, when Bitcoin was valued at nearly 80% lower than its current price. Since then, the leading cryptocurrency has surged by over 370%, creating a significant discrepancy between the refunded amounts and the current market value of the lost assets.
While the refunds provide some closure, many creditors feel shortchanged given the recent crypto market rebound. As the repayment process continues, the broader implications on investor sentiment and market dynamics will be closely monitored.
For now, FTX’s efforts to reimburse users represent a major step forward in the lengthy recovery process following one of the largest financial collapses in cryptocurrency history.
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