Key Takeaways
- FTX Digital Markets is repaying $1.2 billion to creditors on Feb. 18.
- Payouts are based on 2022 valuations, causing concern among creditors.
- The impact on the crypto market remains uncertain, with mixed investor sentiment.
FTX’s Bahamian unit is set to distribute the first batch of repayments to creditors owed less than $50,000.
The payments, scheduled for 3:00 PM UTC, are part of a broader effort to resolve claims following the exchange’s collapse, which left an $8.7 billion hole in customer funds.
Historical context
The failure of FTX in late 2022 triggered a series of insolvencies across the industry, contributing to one of the longest downturns in Bitcoin’s history.
Since then, Bitcoin has surged from a low of $16,000 to over $95,000, raising concerns that creditors will receive payouts at significantly lower valuations.
Market impact
Bitget Wallet COO Alvin Kan noted that the repayments could inject liquidity into the market.
Kan told Cointelegraph:
A significant portion may be reinvested into cryptocurrencies, potentially impacting market liquidity and prices.
However, he acknowledged that the sentiment may be mixed due to the lower valuation basis used for payouts.
Investor sentiment
Despite its limited market-moving impact, the repayment is viewed as a win for investors.
Magdalena Hristova of Nexo stated:
For retail investors, these repayments offer not just the return of funds but a sense of stability and peace of mind.
Next steps
Larger creditors continue to await further announcements regarding their claims as the repayment process unfolds.
