FTX set to flood the market with $16B as debt repayment looms

FTX’s distribution of creditor funds is still expected to start in Q4. The earliest stage of the process is just weeks away, with $16B of crypto assets set to be released back into circulation. 

Even after its crash and deep losses, FTX holds assets estimated to as much as $16B. The remaining wallets of the exchange and Alameda research were scraped and sent into custodial wallets. Some of the assets are still visible in the remaining FTX wallets, or special bankruptcy addresses. 

The claims based on creditor history and FTX balances are estimated at $16.264B. FTX spent months reorganizing and liquidating some of its assets, establishing $12B in cash reserves and sufficient stablecoins. In May, FTX issued a statement claiming its recovered funds were between $14.5B and $16.3B, enough to potentially repay 98% of its creditors. 

The most contentious point is that FTX continues to claim all creditors will be made whole. Unfortunately, BTC depositors on the exchange held whole coins, now trading above $63,000. FTX did not hold or keep these coins in safe custody. So, it will instead repay the monetary value of BTC at the time of the exchange’s failure, which was $16,800. 

The good news is FTX has finished most of the selling and liquidation, only holding a few remaining wallets of tokens and the occasional NFT. The bad news is that the process may not be straightforward and simple, and will take into account a long list of other claims and settlements.


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