FTX’s $5B Payouts: The Drama Unfolds! 🎭💰

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In a twist worthy of a Dostoevsky novel, the FTX Recovery Trust has embarked on a second act of financial theatrics, initiating a $5 billion payout to its creditors on this fateful day, May 30. Eligible creditors from the Convenience and Non-Convenience Classes, those who have jumped through the necessary hoops, are now in line for their share of the spoils.

As per the grand announcement on May 28, the distribution will include Dotcom Customer Entitlement Claims, basking in a 72% distribution; US Customer Entitlement Claims, with a modest 54%; and Convenience Claims, which are the real winners here, receiving a whopping 120%. Talk about a lucky draw! 🎉

Moreover, General Unsecured Claims and Digital Asset Loan Claims will each receive a 61% distribution, as per the reimbursement plan. Recipients can expect their claims to arrive in one to two business days, courtesy of the ever-reliable distribution partners, Kraken and Bitgo. Fingers crossed! 🤞

Crypto investors and speculators are watching these FTX creditor distributions like hawks, as the reimbursements could send ripples through the digital asset markets, potentially causing price volatility. Who knew a payout could be so dramatic? 🎢

The first round of FTX creditor reimbursements

The inaugural round of FTX creditor payments for those with claims under $50,000 was distributed on February 18, totaling a staggering $1.2 billion. Yes, you heard that right! 💸

At that time, Alvin Kan, the chief operating officer at Bitget Wallet, told CryptoMoon that a “significant portion” of the $1.2 billion could find its way back into the crypto markets. Because why not? It’s not like we’ve learned anything from the past! 😏

Reimbursement plan leaves creditors high and dry

The FTX reimbursements have ignited a firestorm of controversy among creditors and customers of the now-defunct exchange. Who knew finance could be so scandalous? 🔥

In September 2024, FTX creditor Sunil Kavuri shared court documents revealing that creditors would be reimbursed based on the date their petition was filed, rather than current market prices. Ouch! Talk about a plot twist! 📉

According to Kavuri, creditors of the former exchange received a mere 10%–25% of their crypto holdings’ value due to this court ruling. It’s like winning a lottery but only getting the ticket price back! 🎟️

“Crypto holders are not whole at petition date prices,” Kavuri lamented, as confirmed by the debtors, the United States Department of Justice, and Judge Kaplan. A real tragedy, isn’t it? 😢

For context, the creditor petition was filed during the depths of the crypto winter when Bitcoin (BTC) was languishing at around $16,000. A dark time indeed! 🌨️

Kavuri raised the alarm again this February, highlighting creditors in 163 countries who are ineligible for reimbursements, including residents of Egypt, Iran, Russia, Greenland, Pakistan, and others. It’s a global crisis, folks! 🌍

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2025-05-31 00:57