The Joint Official Liquidators (JOLs) of the now-defunct cryptocurrency exchange FTX Digital Markets Ltd has announced that payments to creditors will begin on February 18, 2025, marking a significant milestone in the aftermath of one of the most high-profile bankruptcies in crypto history.
FTX Digital Markets, which was based in the Bahamas, collapsed in late 2022, sending shockwaves through the crypto industry. The company’s fall from grace, coupled with the arrest and conviction of its former CEO, Sam Bankman-Fried, has led to a lengthy and complex liquidation process. Now, nearly three years after the bankruptcy filing, the first round of creditor reimbursements is set to begin, bringing some relief to those impacted by the exchange’s collapse.
The initial wave of payments will focus on “Convenience Class” creditors—those with claims under $50,000. These creditors will receive 100 percent of their adjudicated claim value, up to the $50,000 cap, plus 9 percent post-petition interest, which is calculated from November 11, 2022, through the payment date. The interest is designed to address the financial hardship endured during the lengthy bankruptcy proceedings.
The payments will be processed by BitGo, a crypto custody platform, and creditors can expect to see their funds as “pending” transactions up to 10 days before the official distribution date. However, the funds will not become available for withdrawal or transaction until 10 AM ET on February 18, 2025. This marks the first significant step toward reimbursing the thousands of individuals and entities who were affected by FTX’s sudden collapse.
The payment distribution process follows a key legal development back in January when the Supreme Court approved a “Claim Subordination Agreement.” This agreement allows the JOLs to prioritize the repayment of customers and creditors over the regulatory claim filed by the Securities Commission of The Bahamas (SCB), which amounts to $221.55 million. The SCB’s claim pertains to regulatory penalties for breaches of local financial laws, but the court’s decision will allow the interests of creditors, including any interest owed, to take precedence.
This legal approval builds upon the amended Global Settlement Agreement (GSA), finalized in August 2024, which outlined the framework for FTX’s asset recovery process. Under this agreement, the JOLs are tasked with leading recovery efforts in the Bahamas, while their counterparts in the U.S. will handle assets related to the FTX.com exchange. The GSA is designed to ensure a coordinated and efficient distribution of assets to FTX’s creditors across jurisdictions.
For creditors in the Bahamas, the February 18 payment will be the first of several distributions. Other creditors from FTX’s global user base will have to wait until March 4, 2025, for their own reimbursements. Meanwhile, payments to larger creditors and those in the “Non-Convenience Class” are expected to begin in the second quarter of 2025.
