FTX repayments will begin on May 30, with an estimated allocation of more than $5 billion

Author: Turner Wright, CoinTelegraph; Compiler: Deng Tong, Golden Finance

More than two and a half years after filing for bankruptcy, cryptocurrency exchange FTX is working to repay users who have lost access to their funds.

The FTX Recovery Trust announced in a May 15 notice that it would begin distributing funds to a second group of creditors who qualify for the exchange's reorganization plan. From May 30, FTX will distribute more than $5 billion to creditors through cryptocurrency companies BitGo and Kraken "within 1 to 3 business days."

According to the reorganization plan, FTX said that five groups of "convenience categories" will receive asset allocations ranging from 54% to 120%. The repayment plan for the next batch of creditors will be "announced in due course", and if all claims are met, the debtors are expected to pay up to $16 billion.

FTX's second round of repayment details. Source: Sunil Kavuri

FTX began its first round of repayments on February 18 and is expected to repay approximately $1.2 billion to creditors. While former FTX users will likely receive their funds for the first time since the exchange collapsed in November 2022, many have criticized the reorganization plan for basing repayments on the price of cryptocurrency at the time of bankruptcy.

Since the end of 2022, the price of Bitcoin has risen more than 400%, from about $20,000 to more than $100,000 at the time of publication. Under the recovery plan, 98% of creditors are expected to receive cash equal to at least 118% of the value of their initial claims.

Criminal Case Closed

The estate’s announcement comes more than a year after former FTX CEO Sam “SBF” Bankman-Fried was convicted of misappropriating customer funds and sentenced to 25 years in prison. Former Alameda Research CEO Caroline Ellison and former FTX Digital Markets co-CEO Ryan Salame have pleaded guilty and received sentences of two and seven and a half years in prison, respectively.

FTX engineering director Nishad Singh and co-founder Gary Wang have also pleaded guilty and have been sentenced to time served. However, Salame’s wife Michelle Bond, who may not have been directly involved in the exchange’s activities, is still facing campaign finance charges in New York.