FTX Is Ready to Start Paying Back Its Major Creditors by the End of May

After gathering a massive $11.4 billion since its collapse, the cryptocurrency firm is ready to begin making significant payouts

Once-prominent cryptocurrency firm FTX is ready to start paying its major creditors by the end of May, a judge heard on Thursday. The cryptocurrency firm has now mobilised $11.4 billion in assets since its collapse.

After gathering a massive $11.4 billion since its collapse, FTX is ready to begin paying its major creditors, a bankruptcy lawyer said in court on Thursday.

The cryptocurrency firm will begin paying its main debt holders on May 30, said lawyer Andrew Dietderich, who is handling the Chapter 11 case. The main creditors of FTX include investors who are owed millions of dollars, along with institutions that had cryptocurrency stored on the FTX platform.

The 2022 collapse of FTX, once a leading cryptocurrency exchange, left behind a broad array of creditors. Settling their claims quickly would help preserve the most value, but the process is complicated by the sheer number of claimants resulting from the exchange’s downfall.

To put it in perspective, lawyers are dealing with claims that add up to "27 quintillion," said lawyer Andrew Dietderich, who is handling the Chapter 11 case. A quintillion is 1 followed by 18 zeros—1 billion times bigger than 1 billion. In bankruptcy cases, lawyers typically filter out duplicate, inflated, and false claims after a payout plan is approved by a judge. FTX is facing billions of these flawed claims, Dietderich said.

FTX needs to pay legitimate creditors quickly because the interest it’s earning on the $11.4 billion is lower than the 9% rate creditors are earning while waiting for their payments. FTX filed for bankruptcy in November 2022 after its crypto platform was shut down and handed over to insolvency experts. It got court approval for its payout plan in October.

After its crypto platform was shut down and handed over to insolvency experts, FTX filed for bankruptcy in November 2022.

Some smaller creditors, known as "convenience claims," have already begun receiving payments, said Judge Kevin Huynh, who is overseeing the case. These smaller claims arose due to minor inconveniences encountered by creditors.

However, the payments to major creditors will commence on May 30.

FTX is making these payments despite facing an overwhelming number of claims, which, if accepted at face value, would amount to a staggering $27 quintillion. To put that into perspective, a quintillion is 1 followed by 18 zeros—1 billion times the size of 1 billion.

In the realm of bankruptcy, legal teams typically concentrate on filtering out duplicate, inflated, or demonstrably false claims after a payout plan has been approved by a judge. Nevertheless, in the case of FTX, the vast majority of the claims are demonstrably flawed, as explained by Dietderich.

Out of the 3.6 million claims submitted to creditors' committee chairman Jonathan Ber使いやすい