When Will FTX Claims be Paid? What You Need to Know

Bankrupt crypto exchange FTX Trading is set to repay between $14.7 billion to $16.5 billion to its customers and debtors in 2025.

In early January 2025, rumors spread on X (formerly Twitter) that the company had begun the repayments. However, members of the community who have been closely following the debacle refuted the claims.

What’s going on with the FTX distribution? When can the victims of the FTX fraud case expect their distribution? Techopedia answers all these questions, including how to apply for FTX distributions and more.

Table of Contents Table of Contents

1. Key Takeaways
2. When Will FTX Claims be Paid?
3. Will All FTX Customers Receive Their Claims?
4. FTX Collapse: How It Happened
5. Timeline of FTX Collapse & Bankruptcy Proceedings
6. The Bottom Line
7. FAQs
8. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. When Will FTX Claims be Paid?
3. Will All FTX Customers Receive Their Claims?
Show Full Guide
4. FTX Collapse: How It Happened
5. Timeline of FTX Collapse & Bankruptcy Proceedings
6. The Bottom Line
7. FAQs
8. References

When Will FTX Claims be Paid?

FTX customers can expect repayments to begin by March 4, 2025, at the latest. According to an official press release, FTX will begin initial distributions within 60 days of January 3, 2025.

The company plans to repay 98% of customers who held less than $50,000 in assets within the bankruptcy plan’s effective date (January 3, 2025). Creditors will receive about 119% of the amount of their claims, inclusive of interest.

Law firm and legal counsel of FTX debtors Sullivan & Cromwell explained the complexities of the FTX bankruptcy proceeding, which started in November 2022, saying:

“??Unprecedented in light of FTX’s total lack of reliable financial reporting, accounting, or governance systems, the case involved dozens of governmental investigations, hundreds of transactions and litigation disputes, and millions of international creditor claims.

“It also required multiple complex settlements with competing creditor and customer groups, the IRS, the CFTC, the Department of Justice, numerous states and foreign governments, and seven other insolvency proceedings around the world.”

To be eligible to receive FTX distributions, claimants must have created an account with the distribution agent, complete know-your-customer (KYC) verification, and submit the required tax forms before January 20, 2025. However, missing this date only means you miss the first distribution round.

Digital asset management company BitGo and crypto exchange Kraken are listed as the distribution agents for the FTX distribution.

For more information, visit the FTX Support page.

Will All FTX Customers Receive Their Claims?

There is uncertainty whether FTX’s former customer based in Europe will receive distributions.

On January 7, 2025, Dubai-based crypto exchange Backpack announced that it acquired FTX EU – the European arm of the fallen FTX exchange.

In the same announcement, Backpack said Backpack EU will undertake responsibility for distributing the court-approved FTX bankruptcy claims to FTX EU customers.

Backpack added that the reactivation of the European license is underway, and it plans to launch Backpack EU by the first quarter of 2025.

A day later, FTX revealed that the company and the United States Bankruptcy Court for the District of Delaware were unaware of the sale. The company added that the court did not approve Backpack’s acquisition of FTX EU.

It was disclosed that Backpack had not been authorized to make distributions to FTX customers and other creditors.

“Backpack has no involvement in the U.S. bankruptcy-approved process for returning funds to FTX creditors. FTX (is) not responsible for repayment of any funds owed by FTX EU to its former customers,” read the official press release.

Backpack has acquired FTX EU and its MiFID II License.

Our first priority is to return all customer EURO funds on behalf of the FTX estate, followed by rolling out a full suite of spot, margin, and futures trading products.

Crypto perps trading is coming back to Europe ???? pic.twitter.com/ExxYFufZHj

— Backpack ?? (@Backpack) January 7, 2025

FTX Collapse: How It Happened

In 2022, FTX was the third-largest crypto exchange in the world, with over a million users. The exchange’s collapse unfolded when crypto publication CoinDesk reported in November 2022 that trading firm Alameda Research – FTX’s sister firm co-founded by Sam Bankman-Fried (SBF) – held a significant portion of its assets in FTX’s issued FTT token.

The close relationship between FTX and Alameda had already drawn suspicion by the time following a Bloomberg report that Alameda functioned as a market maker for FTX.

The Coindesk article triggered customers to withdraw their funds from the exchange. A few days after the publication, Binance co-founder and then-CEO Changpeng Zhao announced plans to sell all of the firm’s FTT token holdings. The announcement aggravated the situation, causing a bank run on the FTX exchange.

On November 11, 2022, FTX, Alameda, and over 100 affiliated companies filed for bankruptcy.

Timeline of FTX Collapse & Bankruptcy Proceedings

The Bottom Line

The FTX bankruptcy proceedings have drawn mixed reactions from the crypto community. Many have praised the involved parties for solving the complex process and providing clarity to debtors.

However, FTX’s former customers are set to suffer losses as the claims are valued based on cryptocurrency prices on November 11, 2022.

Bitcoin (BTC) prices closed at about $17,000 on November 11, 2022. As of January 17, 2024, BTC traded over $101,700, an increase of nearly 500% from November 11, 2022.

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