The Blubber

FTX Bahamas will begin creditor repayments on Feb. 18 through BitGo, one of the distribution partners chosen during bankruptcy restructuring hearings. Sunil Kavuri, a spokesperson for the largest FTX creditor group, stated that individual claims from Bahamas-based creditors will be capped at $50,000.

The court-approved reorganization plan took effect on Jan. 3, requiring repayments to start within 60 days. Court documents show that FTX has $13 billion set aside for payouts.

However, half of that amount is being withheld for disputed claims, leaving the exact allocation for Bahamas creditors uncertain.

FTX, which was headquartered in the Bahamas, collapsed in 2022 under the leadership of founder Sam Bankman-Fried. Investigations revealed widespread corporate mismanagement and fraudulent activities allegedly orchestrated by Bankman-Fried.

Analysts estimate FTX’s collapse resulted in a $16 billion shortfall. Asset recovery efforts, led by bankruptcy CEO John J. Ray III, are expected to continue through 2027.

Bankman-Fried was convicted on multiple counts of fraud and sentenced to 25 years in prison. He has since accused the court of bias, requested a new trial, and his parents have reportedly sought a pardon from President Donald Trump.

Meanwhile, former members of his inner circle, including Caroline Ellison, ex-CEO of Alameda Research, received reduced sentences after cooperating with authorities and forfeiting assets gained during their time at FTX.