Crypto: FTX initiates its repayment plan

The victims of the FTX bankruptcy finally see the end of the tunnel. The crypto exchange officially activated its refund plan on January 3, 2024, paving the way for funds to be returned to millions of harmed users.

An FTX reimbursement process finally clarified

The first repayments should occur within 60 days for creditors claiming less than $50,000, according to the reorganization plan validated by the court.

BitGo and Kraken, two major players in the crypto industry, will oversee the distribution of the funds, estimated at around $16 billion. The plan provides for a particularly favorable reimbursement, since 98% of users could recover up to 119% of the declared value of their assets.

Eligible creditors must have filed their claim via the official FTX platform. The administrator warns against phishing attempts, while many fraudulent emails are already circulating pretending to be FTX.

This repayment phase marks the culmination of a bankruptcy procedure which lasted more than a year, since the spectacular collapse of FTX in November 2022.

Disputes persist despite the progress of the file

However, the method of calculating reimbursements is controversial. Creditors will receive the equivalent of their assets valued at November 2022 prices, ignoring the sharp rise in the crypto market since.

Bitcoin has increased by more than 400% since the bankruptcy to reach nearly $100,000. This spectacular increase leads many users to denounce a calculation method that penalizes them.

This frustration adds to the trauma caused by the revelations about the fraudulent management of FTX. Sam Bankman-Fried, former CEO, was sentenced to a long prison term, as were Caroline Ellison and Ryan Salame. Only Nishad Singh and Gary Wang, also implicated in the scandal, avoided incarceration.

While no users have yet confirmed receipt of their funds, this refund plan is a crucial step toward resolving one of the biggest debacles in cryptocurrency history.