TLDR
- FTX creditors may recover between 9% and 46% in real crypto value, despite being promised 143% in fiat payouts.
- Bitcoin’s price surge from $16,871 to over $110,000 means creditors only recover 22% in real BTC terms.
- Ether creditors receive just 46% of the real value, while Solana holders get only 12%, despite fiat repayments.
- The first round of FTX payments totaling $1.2 billion was distributed to creditors in February 2018.
- The FTX Recovery Trust launched a second payout worth $5 billion in May for eligible creditors.
FTX creditors may recover far less value than expected when measured against current cryptocurrency prices. Sunil, a prominent creditor representative, estimates real recovery rates ranging from 9% to 46%. The exchange’s planned 143% fiat repayment fails to account for the gains in the crypto market since 2022.
Real Recovery Rates Fall Short of Expectations
Bitcoin prices have climbed from $16,871 during the petition period to over $110,000 today. This surge means that FTX creditors, who are receiving 143% in fiat terms, only recover 22% in real BTC value. The gap between nominal and actual returns continues to widen as markets rise.
Ether holders face similar shortfalls in their recovery calculations. The 143% fiat payout translates to just 46% in real ETH terms. Meanwhile, Solana creditors fare worse with only 12% real value recovery.
Sunil shared these calculations in a Sunday post on X platform. He emphasized that FTX creditors are not whole despite official repayment percentages. The exchange collapsed in 2022 when crypto valuations were substantially lower than current levels.
Payment Distributions Progress Through Multiple Rounds
FTX distributed its first creditor payments totaling $1.2 billion on February 18. This initial round covered recipients with claims under $50,000. The FTX Recovery Trust then launched a second payout worth $5 billion in May.
The May distribution included several claim categories with varying recovery percentages. Dotcom Customer Entitlement Claims received 72% while US Customer Entitlement Claims got 54%. Convenience Claims achieved 120% recovery in the second round.
General Unsecured and Digital Asset Loan Claims are scheduled for 61% distributions. Kraken and BitGo will process these payments within one to two business days. Multiple payment channels ensure efficient distribution to eligible creditors.
Potential Additional Recovery Through Airdrops
Sunil mentioned the possibility of additional recovery through airdrops from external cryptocurrency projects. He cited Paradex as one initiative targeting FTX creditors specifically. These projects view FTX creditors as valuable assets for their platforms.
“FTX creditors are the most valuable asset and attractive for projects,” Sunil noted. Such airdrops could provide supplemental compensation beyond official FTX distributions. However, these remain uncertain and depend on individual project decisions.
Former CEO Appeals Conviction
Sam Bankman-Fried, former FTX CEO, is scheduled to appear before the US Court of Appeals. The hearing is scheduled for November 4 at the Second Circuit. He currently serves a 25-year prison sentence for fraud and conspiracy.
Bankman-Fried’s legal team filed the appeal in September 2024. They argue he was “never presumed innocent” during his trial. The appeal also claims prosecutors misrepresented how FTX handled customer funds.
The appeal challenges his 2023 conviction on seven felony counts. His attorneys contest the legal proceedings that led to his sentence. The November hearing represents the next phase in his effort to overturn the conviction.
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