- FTX initiates over $5B repayment round, marking a major step in its recovery plan
- Repayments may inject liquidity into crypto markets, potentially boosting asset demand
- Eligible users receive up to 120% of claims via BitGo and Kraken under court plan
FTX has officially kicked off its largest creditor repayment round yet, distributing over $5 billion in stablecoins as of May 30. The long-awaited process began around 9:00 AM ET and is expected to conclude within one to three business days.
This massive release of funds follows the collapse of the crypto exchange in November 2022, which left thousands of users without access to their assets. As the second phase of repayments, this wave marks a turning point for FTX’s reorganization strategy and could reshape crypto market dynamics in the short term.
The FTX Official Recovery Trust has confirmed that eligible users will receive distributions through their selected platforms, either BitGo or Kraken. These two providers will facilitate the transfers under the court-approved plan. According to Solid Intel data, this disbursement represents approximately 2% of the global stablecoin supply, underscoring its market significance.
Strategic Rollout with Broader Impacts
This payout follows the initial February round that returned about $1.2 billion to creditors. However, the current wave dwarfs the first in size and potential impact.
The creditors included in this second stage belong to one of five designated “convenience classes,” structured under the bankruptcy court’s framework. Payout percentages range from 54% to 120% of claim values, depending on how assets were valued at the time of the exchange’s collapse.
FTX creditor advocate Sunil Kavuri has been at the forefront of guiding impacted users through the process. He notes that this phase targets those with more substantial verified claims, potentially accelerating market re-engagement. Moreover, this stage is seen as crucial in restoring a degree of trust in centralized crypto institutions.
Liquidity Influx Could Influence Bitcoin and Broader Market
Besides helping creditors, this liquidity injection has sparked wider market speculation. Analyst Miles Deutscher pointed out that much of the released capital could rotate back into crypto markets. He suggests that this inflow might not be cashed out immediately but could instead fuel demand across digital assets.
Significantly, this repayment wave arrives just as Bitcoin flirts with its previous price highs. Consequently, any sudden reallocation of stablecoins could trigger noticeable volatility. Early on-chain data from Kraken and BitGo will be critical in tracking how these funds are used in the market.
