The post FTX’s $1.2B Crypto Repayments Start Soon, but Here’s Why It’s Unfair appeared first on Coinpedia Fintech News
After more than two years of uncertainty, FTX, the once-thriving cryptocurrency exchange, is finally ready to repay over $1.2 billion to its users. This marks the first step in its ambitious plan to return up to $16 billion to creditors, some of whom have been locked out of their funds since the platform’s collapse.
But as the repayment process gets underway, questions remain—how will it impact the crypto market? And are these payments fair given the dramatic rise in crypto prices since the bankruptcy?
Keep reading to find out what’s at stake for creditors.
What Creditors Need to Do
As part of the restructuring plan approved in October 2024, FTX will repay users who are owed up to $50,000 in digital assets. Creditors need to complete tasks like submitting tax forms and finishing their Know Your Customer (KYC) verification by January 20 to receive payments in the first round.
Missed the Deadline? You’re Not Left Out
Creditors who miss the January 20 deadline will still be part of future repayment rounds but will not be included in the initial distribution unless they complete the required steps.
The repayment amounts are based on the prices of cryptocurrencies at the time of FTX’s bankruptcy. This approach has drawn criticism, especially because Bitcoin has surged by over 370% since November 2022. Some creditors question whether using those past prices is fair, given how much the value of Bitcoin has changed.
Could FTX Repayments Mirror Mt. Gox’s Impact?
The upcoming repayments are expected to bring significant changes to the crypto market. Over $2.4 billion could flow into the crypto market, as some investors might cash out for financial security, while others may choose to reinvest.
Blockchain expert Anndy Lian has drawn comparisons to the Mt. Gox case, where many creditors held onto their Bitcoin instead of selling, which helped limit market volatility. A similar response from FTX creditors could reduce the risk of price swings, potentially providing more stability to the market.
With billions in motion, the aftermath of FTX’s collapse is far from over, leaving the crypto world on edge for what comes next.