FTX Kickstarts $1.2B Creditor Payout Post-Trump Inauguration; Crypto Reinvestment on the Rise for 2025

FTX, the bankrupt cryptocurrency exchange, is gearing up to repay its creditors, with the process starting early this year.

Related: Michael Saylor Champions Bitcoin as Superior to ‘Toxic’ Bonds in Corporate Strategy Shift

The initial payout will prioritise smaller creditors, with claims under US$50K (AU$80.7K) being part of US$1.2B (AU$1.94B) in payments. Under the restructuring plan approved in October 2024, 98% of FTX users may recover up to 119% of the declared value of their funds. Total payouts could reach as high as US$16.5B (AU$26.4).

All creditors must meet specific requirements, including submitting tax documents and completing identity verification by January 20 this year, coinciding with President-elect Donald Trump’s inauguration. BitGo and Kraken will oversee fund distribution, managing the technical and logistical aspects of the process.

According to FXT creditor Sunil, repayments won’t start before the aforementioned date. 

Related: Tether Shifts Headquarters to El Salvador Following Digital Asset License Approval

Plan Receives Much Criticism, Could See Market Surge

The repayment plan has been heavily criticised for using cryptocurrency values at the time of FTX’s bankruptcy rather than current market prices. So no, no gains for affected investors. Many creditors argue that this approach fails to reflect the substantial price increases, including Bitcoin’s 370% surge since November 2022.

Yet, the good side, arguably, is that the repayments could be used to inject capital into the cryptocurrency market, with some analysts predicting it could trigger another bullish phase. 

Last but not least, FTX has warned of ongoing phishing attempts, including fraudulent emails and fake claim portals targeting creditors. Security will be a top priority for investors as the repayment process unfolds, as hackers never miss a chance to steal anyone’s crypto.