The bankrupt Crypto Exchange FTX has begun repayments to creditors for a second round, paying over $5 billion to individuals and entities with approved claims.
This marks a major step in the bankruptcy proceedings of the collapsed exchange, following the company’s initial payment of $1.9 billion.
Will FTX payments trigger potential market gatherings?
In an update on May 30th, Defunct’s company confirmed that the second round of distribution targets eligible claims in convenience and non-compulsory classes that meet the required pre-distribution conditions.
“This represents the continued progress in returning cash to FTX customers and creditors. We are proud of the remarkable success of our recovery so far. Our work continues to recover more for creditors and resolve unresolved claims.”
With exchange, payments are expected to begin on the same day and be completed within 1-3 business days. Bitgo and Kraken are handling distributions.
Sunil Kavuri, a prominent FTX creditor advocate, shared that Kraken began processing the FTX US distribution on May 30th and is scheduled for international payments on June 2nd. The US total is $312 million, of which $168 million falls under claims of over $50,000.
Meanwhile, FTX creditors receive a variety of amounts depending on their classification.
The exchange noted that customers with a Dotcom qualification claim receive 72% of the qualifying funds, while US customer qualification claims receive 54%.
Typically, convenience claimants with low balances will receive 120% of their initial claim. Additionally, at this stage, approximately 61% of the typical unsecured and digital asset loan claims will also be repaid.
Meanwhile, FTX has issued a security notification warning users about rising phishing fraud related to the payout process. The exchange urged all claimants to be vigilant before taking action and to verify the source of communication.
This is because several industry analysts have carefully looked at the distribution and are predicting a potential increase in crypto trading activity. Many of the payments are Stablecoins, allowing recipients to quickly redeploy their funds to other digital assets.
Market analyst Miles Germany believes this liquidity could serve as a short-term catalyst for altcoins.
Coinbase researchers also reflected this view. They suggested that institutional recipients may consider re-entering the market, particularly as regulatory clarity improves in key jurisdictions.
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