The cryptocurrency exchange FTX, which collapsed under Sam Bankman-Fried’s leadership, is set to commence repayments to its primary creditors by the end of May, according to recent court updates in Delaware.
The firm has secured $11.4 billion in cash to distribute among the myriad of parties impacted by its 2022 bankruptcy, with the initial payments to significant creditors scheduled for May 30.
This group includes institutional investors and companies that had cryptocurrency stored on the FTX platform. Smaller creditors with claims under $50,000 have already begun to receive their distributions.
FTX’s downfall created a substantial financial gap and left many creditors frustrated, as numerous individuals anticipated repayment in cryptocurrency rather than in cash. Following the bankruptcy, Bitcoin’s price has increased significantly, amplifying the frustrations of those awaiting the return of their assets.
The process of resolving FTX’s financial obligations has been hampered by a vast number of claims, many of which appear to be questionable. A bankruptcy attorney for the company indicated in court that FTX has received “27 quintillion” claims, many of which are duplicates or potentially fraudulent.
The urgency is heightened by interest payments. Although FTX only generates a modest return on its cash reserves, legitimate creditors have the right to receive 9% annual interest on outstanding claims. This means the longer it takes to disburse payments, the more the company might ultimately owe.
Read more: Nearly All FTX Creditors Will Get 118% of Their Funds Back in Cash, Estate Says in New Plan