FTX, the cryptocurrency exchange that collapsed in November 2022, is set to start creditor repayments on Feb. 18.

The initial repayments will focus on “convenience class” creditors with claims of under US$50,000.

This initiative aligns with FTX’s reorganization plan, which was approved on Jan. 3, following extensive bankruptcy proceedings.

Smaller creditors will receive 119% of their adjudicated claim value, totalling around US$1.2 billion in payouts.

Claims over US$50,000 are anticipated to be addressed starting in the second quarter of 2025.

Overall, FTX aims to distribute about US$17 billion in various stages, with US$7 billion earmarked for larger claims.

To qualify, eligible creditors must complete the Know Your Customer verification process. They also need to provide tax documentation and register with distribution partners – BitGo or Kraken.

Creditors who do not meet these stipulations will be excluded from the Feb. 18 distribution. However, they may still qualify for future payments if their issues are resolved.

FTX’s collapse resulted from a liquidity crisis and a subsequent bankruptcy filing in late 2022.

Former CEO Sam Bankman-Fried was sentenced to 25 years in prison for his involvement in the company’s failure. Other former executives have also faced legal action.

The restructuring plan, approved in late 2024, prioritizes creditors with smaller claims. This ensures that 98% of affected users can expect around 119% of their claimed funds.

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