FTX has announced it is set to initiate repayments to creditors in the Bahamas this month, ahead of larger distributions anticipated in the first quarter of 2025.
Starting February 18, FTX Bahamas will commence repayments through BitGo, one of the chosen distribution partners from the bankruptcy restructuring hearings. Sunil Kavuri, a representative of the largest creditor group at FTX, highlighted that individual claims for Bahamian creditors will be limited to $50,000.
The reorganization plans, which received court approval, took effect on January 3, mandating that creditor repayments begin within a 60-day timeframe. Court documents indicated that the failed crypto exchange has $13 billion set aside for payouts.
Nonetheless, the estate has requested to withhold 50% of these funds for disputed claims, leaving the total amount available to Bahamian creditors uncertain.
Once headquartered in the Bahamas, FTX collapsed in 2022 under the direction of its founder, Sam Bankman-Fried. Investigations revealed corporate mismanagement and fraud allegedly orchestrated by the former crypto magnate.
Experts estimate that the downfall of FTX resulted in a $16 billion shortfall. Reorganization administrators, led by bankruptcy CEO John J. Ray III, expect that efforts to recover assets may last until 2027.
In the meantime, Bankman-Fried was convicted on various criminal charges, including fraud, and sentenced to 25 years in prison. He has since claimed bias in judicial proceedings, sought a new trial, and his parents have reportedly requested a pardon from President Donald Trump.
Members of Bankman-Fried’s former close circle, such as the ex-CEO of Alameda Research, Caroline Ellison, received more lenient sentences and were required to forfeit wealth accrued during their time with FTX.
