FTX Is Ready to Begin Reimbursing Claims Exceeding $50K Starting May 30

FTX is poised to begin reimbursing claims over $50,000 starting May 30, nearly 27 months after its spectacular collapse in November 2022

FTX is set to begin reimbursing claims over $50,000 starting May 30, almost 27 months after its spectacular collapse in November 2022, a significant development in the exchange's contentious bankruptcy process.

The exchange, now helmed by CEO John Ray III, will commence making the first installments to major creditors from its $11.4 billion reserve, according to bankruptcy attorney Andrew Dietderich.

However, the defunct exchange is facing “27 quintillion” claims, a significant portion of which are fraudulent or questionable, reports Bloomberg.

Some “convenience class” creditors have already been repaid based on digital asset values at the time of the bankruptcy filing in November 2022. But concerns remain as FTX has projected that creditors will receive 118% of their claims in cash.

Many creditors argue that this figure is deceptive, given it doesn't factor in the price appreciation of various digital assets since the filing. In the past two years, tokens like Solana have risen around 650%, XRP by 450%, and Bitcoin by 500%, while Ethereum has increased nearly 47%. Despite these surges, repayments will be based on the assets' value at the bankruptcy filing.

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Sunil Kavuri, representing the largest creditor group, said that while the repayments will provide closure for those affected, the value is assessed based on the petition date prices, implying creditors won't fully recover in present crypto terms.

Creditors will also accrue an additional 9% annual rate on their claims during the waiting period. But the process could take several months, putting pressure on FTX to complete the reimbursements in a timely manner.