 FTX to begin distributing $1.2B to creditors after Trump inauguration 
2025-01-13
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FTX is preparing to distribute more than $1.2 billion in repayments to the users of the bankrupt former cryptocurrency exchange.
FTX, once the world’s second-largest centralized cryptocurrency exchange (CEX), is set to begin repaying defunct users who have been unable to access their funds for over two years.
Users of the exchange who are owed up to $50,000 worth of digital assets have until Jan. 20 to fulfill their repayment requirements.
FTX will likely start repaying claims of up to $50,000 after Jan. 20, according to popular FTX creditor Sunil, who is part of the largest group of over 1,500 FTX creditors, the FTX Customer Ad-Hoc Committee.
“Jan 20th: FTX has given until 20th Jan to fulfill pre-distribution requirements for initial distribution. Repayments likely won’t start before then,” Sunil wrote in a Jan. 11 X post.
The Jan. 20 deadline coincides with US President-elect Donald Trump’s inauguration, which has sparked expectations of more crypto regulatory clarity and the possible acceptance of the Bitcoin Act. The act proposes creating a Bitcoin (BTC) reserve for the US, the world’s largest economy.
Combined with new capital from the upcoming FTX repayments, Jan. 20 could catalyze the next leg up in the 2025 crypto market cycle, which could see Bitcoin surpass $200,000, according to some industry watchers.
Will FTX repayments lead to crypto market volatility?
Users claiming up to $50,000 are the first group of investors to receive repayments, according to FTX’s restructuring plan, which was approved in October 2024. The plan stated that 98% of FTX users could expect to be paid 119% of the declared value of their funds.
However, some creditors have criticized the repayment model, which reimburses claimants based on cryptocurrency prices at the time of bankruptcy. Bitcoin prices, for example, have increased by more than 370% since November 2022.
While some crypto investors expect heightened market volatility, the FTX repayments are a crucial step for rectifying past damages and repairing the industry’s reputation.
The repayments will lead to mixed investor reactions, depending on individual risk appetite, according to Anndy Lian, author and intergovernmental blockchain expert.
Lian told Cointelegraph that some of the repayments may flow back into other cryptocurrencies:
“The MT. Gox scenario does set a precedent, where a lot of folks chose to hold onto their coins hoping for better days,” Lian added.
Most Mt. Gox creditors have mostly opted to hold their BTC despite Bitcoin’s over 8,500% value appreciating in the 10 years since the Japanese exchange collapsed.
On July 30, Mt. Gox completed 41.5% of its Bitcoin distribution to creditors, who received a total of 59,000 Bitcoin.
Despite receiving nearly $4 billion worth of Bitcoin, the Mt. Gox creditors weren’t selling, according to a July 29 Glassnode report, which stated:
Crypto firms BitGo and Kraken announced in December that they would assist in distributing recoveries to FTX users. Assuming all users file complete claims, the exchange could be expected to pay out roughly $16 billion.
How bad is the FTX collapse for Bitcoin? On-chain analyst explains. Source: YouTube