FTX, the bankrupt cryptocurrency exchange, has begun its second round of payments to creditors, distributing over $5.4 billion.
Second Round of Repayments
This follows an initial payout to smaller creditors earlier this year. This round includes both those smaller creditors and those with larger claims. Creditors will see the money in their accounts within one to three business days via BitGo or Kraken.
Where’s the Money Coming From?
The funds are coming from FTX’s $11.4 billion in cash reserves. The company plans to announce further distributions soon.
A Big Payout
A US bankruptcy court previously approved a plan to return between $14.7 billion and $16.5 billion to FTX’s former customers. This means most creditors will receive around 119% of what they lost when FTX collapsed. This is higher than expected thanks to rising cryptocurrency prices and FTX’s investment in the AI company Anthropic.
The FTX Collapse
The collapse of FTX and its subsequent bankruptcy stemmed from accusations that former CEO Sam Bankman-Fried misused billions of dollars in customer funds by lending them to Alameda Research, FTX’s trading arm. Bankman-Fried was sentenced to 25 years in prison for fraud.
