FTX to Begin $1.2 Billion Creditor Repayments in February  

• FTX’s first creditor repayments, totaling $1.2 billion, will prioritize claims under $50,000, starting in February and concluding by March 4. 
• Creditors must complete KYC, W-8Ben, and tax forms by specified deadlines to qualify for initial repayments, ensuring compliance with distribution rules. 
• Everyday expectations of repayments have instilled bullishness in the crypto market with many analysts expecting reinvestments to drive another round of Bitcoin and Altcoins. 

Beleaguered cryptocurrency exchange FTX has announced its creditors’ payout schedule starting from February 2023. The company added that the first $1.2 billion payout will be made to those creditors who have been offered an amount less than $50,000. The record date for these repayments was set for January 3. 

Because most FTX creditors want to receive compensation in the first distribution, they should meet the pre-distribution requirements by January 20th. W-8Ben forms must be provided, the Know Your Customer (KYC) process needs to be completed, as well as a tax withholding form has to be provided within 30 days. Most significantly, any creditor who does not meet these timelines will lose his/her repayments. 

Pre-Distribution Requirements and Deadlines 

FTX creditor Sunil Kavuri, through a post on X (formerly Twitter), emphasized the need for creditors to meet the outlined conditions. He reiterated that payments would be withheld if tax forms were not submitted within 60 days. The reorganization plan ensures small creditors receive repayments first, reflecting the company’s focus on equitable distribution. 

The repayment process is expected to span several weeks, potentially concluding by March 4. This timeline aligns with the terms specified in FTX’s bankruptcy reorganization plan and the Confirmation Order approved by the U.S. Bankruptcy Court overseeing the proceedings. 

Concerns Over Fraudulent Activity 

Despite the progress, creditors have voiced concerns about phishing attempts and fraudulent portals claiming to process repayments. These scams have targeted FTX creditors, prompting warnings about the importance of verifying sources before engaging in the repayment process. 

FTX has yet to comment on measures to address these fraudulent activities but continues to update creditors through official channels to ensure transparency in the distribution process. 

Impact on the Crypto Market 

The anticipated repayments have sparked optimism among market participants, with analysts predicting a potential boost to the cryptocurrency market. Many believe creditors will reinvest their funds, driving momentum for Bitcoin and altcoins. 

Additionally, the case of FTX EU remains unresolved, with the company confirming that 100% of FTX EU’s share capital is still owned by FTX Europe AG. No transfer has been approved by the U.S. Bankruptcy Court, countering earlier claims made by Backpack regarding acquisition rights.