FTX to Distribute $5 Billion to Creditors Starting May 30, Boosting Crypto Liquidity
FTX, the cryptocurrency exchange that collapsed in November 2022, is set to distribute over $5 billion to creditors starting May 30, 2025, as part of its Chapter 11 bankruptcy plan. This second phase of repayments follows an initial distribution of $1.2 billion in February 2025, with crypto platforms BitGo and Kraken facilitating the process.
The repayment process has faced challenges, including a June 1, 2025, deadline for nearly 400,000 creditors to complete Know Your Customer (KYC) verification. This crucial step, part of Anti-Money Laundering (AML) regulations, ensures the true identity of customers is verified to prevent fraud and illegal activities. Failure to complete KYC within the deadline may result in loss of claims to Guthaben or other financial advantages.
The FTX Recovery Trust aims to repay creditors at least 118% of their claim values as of November 2022. The $5 billion distribution could inject liquidity into the crypto market, potentially boosting Bitcoin and altcoin prices. Nearly 80% of FTX creditors who received repayments in the first phase have reinvested their funds into cryptocurrencies, particularly Bitcoin and altcoins like Solana. Four creditor groups will receive distributions, with payouts ranging from 54% to 120% of their holdings' value at the time of FTX's collapse.
FTX's distribution of over $5 billion to creditors is a significant step in its bankruptcy proceedings. With the deadline for KYC verification approaching, creditors are urged to complete the process to ensure they receive their repayments. The crypto market anticipates a boost in liquidity and potential price increases following this distribution.
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