FTX, the collapsed cryptocurrency exchange, has recently announced plans to repay its customers and creditors.  Rumours are starting to gather pace that the payments will begin as early as the first week of October.

Full Repayment PLUS Interest.

FTX now claims that 98% of its creditors, including individual investors who had $50,000 or less with FTX, will receive the funds they lost.   The company expects to have enough money to pay customers' and creditors' claims, with some reports suggesting repayment of 119% to 143% of the original claim amount, plus 9% interest.  Full repayment is expected to surpass $16 Billion!

Repayment Controversy

There is still a lot of controversy surrounding the valuations of the repayments however as the reimbursement amount will be based on the November 2022 price of the cryptocurrency, which is when FTX collapsed.  The price of Bitcoin and most Cryptocurrencies have significantly increased since then, so people would rather be paid their coins back instead.

So how does this affect me, why do you care?

There are two main reasons.

After the initial fraud and collapse of FTX, the main worry for everyone who didn't lose money was the fact that the company still had a lot of coins and that they would have to sell them all to repay their creditors adding a lot of selling pressure to a market that had already been sucked dry of liquidity.  With the company now in a position to repay, you have to conclude that the selling is now done and the selling pressure can ease.

The other reason is that a lot of the customers who are going to be receiving the funds back from FTX are more than likely still involved in Crypto and the hope is that they re-invest their funds back into the markets.  $16B is a lot of money to flow back into Crypto, however, no one really knows how much of it will be re-invested.