FTX to pay back its major creditors by the end of May

FTX, a former cryptocurrency firm, will start paying its creditors on May 30, according to lawyer Andrew Dietderich. The company has accumulated $11.4 billion in cash since it shut down and filed for bankruptcy in November 2022.

Minor creditors, who hold what FTX labels “convenience claims,” began receiving payments earlier, but the main group of creditors must wait until the end of May. This group includes investors owed millions of dollars such as institutions that held huge amounts of crypto on the platform. They suffered huge losses when the exchange collapsed in 2022.

Dietderich informed US Bankruptcy Judge Karen Owens in Wilmington, Delaware, that the delay in paying all creditors stems from a large number of questionable claims. He said that FTX faces “27 quintillion” claims, emphasizing that a quintillion is a 1 followed by 18 zeros. These include duplicates, false claims, or conflict with KYC requiring identity checks.

While such large numbers of claims are not unusual in major bankruptcies, Dietderich warned that it will take time to filter out the invalid ones. He added that the company seeks to compensate legitimate creditors as soon as it can.

The case is FTX Trading Ltd., 22-11068, in the US Bankruptcy Court for the District of Delaware.