FTX Resumes Client Payouts Amid Recovery Efforts

The former clients of the collapsed cryptocurrency exchange FTX have begun to receive payouts as part of the second phase of its restructuring plan, amounting to approximately $5 billion. Payments are being processed via FTX's partners, custodians BitGo and the Kraken exchange, although users in countries such as Russia, Ukraine, Belarus, Tajikistan, and Kyrgyzstan face barriers due to access restrictions. No resolutions have been reached for settlements within these jurisdictions. The transfers are expected to be completed within 1-3 business days. At this point, clients are receiving around 74% of the dollar value of their balances as of the November 2022 bankruptcy, with small claimants (up to $50,000) potentially receiving up to 119% including interest. The overall liquidation plan aims to recover between $14.7 billion and $16.5 billion. Once a leading crypto exchange until its fall in November 2022, which triggered a market crash, FTX's new management in 2024 declined any restart plans. The growing markets have enabled the formation of a compensation fund from the recovering assets of FTX, which have significantly appreciated, including cryptocurrencies and investments in tech firms. The exchange's founder, Sam Bankman-Fried, was sentenced to 25 years in prison for fraud and misappropriation of client funds.