Creditor Payouts Adjusted for Current Crypto Market Valuations
FTX creditors may receive significantly less than initially expected once payouts are adjusted to reflect the current crypto market valuations, according to Sunil, a well-known FTX creditor representative.
In a recent X post, Sunil estimated that actual crypto recovery rates for FTX creditors range between 9% and 46%, depending on the asset.
He explained that while the exchange’s plan to repay 143% of claims in fiat currency appears favorable on paper, it doesn’t account for how much Bitcoin, Ether, and Solana have appreciated since FTX’s 2022 collapse.
“FTX creditors are not whole. The 143% fiat repayment doesn’t reflect the losses in crypto-denominated terms.”
Crypto Value Gap Widens
According to Sunil’s analysis, Bitcoin’s petition price was $16,871, compared with over $110,000 today.
A 143% fiat repayment therefore equates to just 22% of the original BTC value. Ether’s real recovery stands at roughly 46%, while Solana creditors recover around 12% of their holdings in crypto terms.
The surge in digital asset prices since the bankruptcy has significantly diluted the relative value of the fiat repayments being issued to creditors.
Potential for Extra Recovery Through Airdrops
Despite this gap, Sunil highlighted the potential for “extra recovery” through external airdrops aimed at FTX creditors.
He cited Paradex as one such initiative, noting that “FTX creditors are the most valuable asset and attractive for projects.”
FTX Recovery Trust Payouts
The first round of creditor payments, totaling $1.2 billion, was distributed on February 18 to claimants with less than $50,000 in verified claims.
A second round of payments amounting to $5 billion was launched in May under the FTX Recovery Trust, covering multiple claim categories, including Dotcom Customer Entitlement Claims (72%), U.S. Customer Entitlement Claims (54%), and Convenience Claims (120%).
General Unsecured and Digital Asset Loan Claims are next in line to receive approximately 61% distributions, with payments facilitated through Kraken and BitGo within two business days.
Sam Bankman-Fried’s Appeal Moves Forward
Meanwhile, former FTX CEO Sam Bankman-Fried is set to appear before the U.S. Court of Appeals for the Second Circuit on November 4 in a bid to overturn his conviction.
His legal team filed the appeal in September 2024, arguing that he was “never presumed innocent” and that prosecutors misrepresented how FTX customer funds were managed.
Bankman-Fried was sentenced to 25 years in prison earlier this year after being convicted on seven felony counts, including wire fraud and conspiracy.