FTX Digital Markets, the Bahamian branch of the collapsed cryptocurrency exchange, will repay $1.2 billion to its first group of creditors today February 18, 2025.
This marks an important step in the exchange’s bankruptcy process following its dramatic $9 billion collapse in 2022.
The repayments will be made to users who are owed less than $50,000, providing relief to many who were affected when FTX and its subsidiaries filed for bankruptcy. The payments are expected to bring new liquidity into the crypto market, although concerns remain about the valuation model used to determine payouts.
Impact on the Crypto Market
The collapse of FTX triggered one of the most severe downturns in the cryptocurrency industry, leading to Bitcoin prices dropping to nearly $16,000 and shaking investor confidence. Now, with repayments underway, some believe the crypto market could see a partial recovery.
According to Alvin Kan, COO of Bitget Wallet, a portion of the funds may be reinvested into cryptocurrencies, influencing market liquidity and asset prices. However, he noted that while the repayments could boost investor sentiment, the fact that claimants are being reimbursed based on 2022 cryptocurrency prices—which were significantly lower than today—has caused frustration among some creditors.
Mixed Reactions from Creditors
Despite being seen as a victory for justice, some FTX creditors have criticized the repayment structure. Since Bitcoin has risen over 370% since November 2022, many claimants argue that they are receiving far less value than their holdings would be worth today.
Magdalena Hristova, PR manager at Nexo, pointed out that while the first batch of payments is a positive step, the overall market impact may be limited. Many smaller creditors might choose to cash out instead of reinvesting in crypto, given the volatility of digital assets.
What’s Next for Larger Creditors?
While this initial payout focuses on creditors with claims under $50,000, larger creditors are still waiting for updates on when they will receive their funds. The FTX repayment process remains ongoing, and further announcements are expected in the coming months.
Though the market impact of this first repayment may be modest, the event represents a turning point for the crypto industry, signaling progress in rebuilding trust and restoring stability after one of the largest financial collapses in crypto history.