On March 31, Bloomberg said that FTX used US$11.4 billion to repay its main creditors at the end of May, and small creditors have collected funds, and the funds are derived from asset disposal, etc., and the impact remains to be seen.
Amid the turmoil and changing cryptocurrency markets, major events always touch the nerves of investors. Now, a piece of news has attracted widespread attention: According to a report by Bloomberg on March 31, FTX plans to use the $11.4 billion cash reserves accumulated since the closure at the end of May to repay debts to major creditors. This move makes people wonder where this huge cash reserve comes from? What impact will it have on the cryptocurrency market?
Andrew Dietderich, the lawyer in charge of FTX Chapter 11 bankruptcy case, revealed to the judge that small creditors holding "convenient creditors" have taken the lead in receiving payments, while the main creditor group will have to wait until May 30 before they can receive their first repayment. Behind this repayment plan is the complex asset liquidation and restructuring process since FTX filed for bankruptcy in November 2022.
Since FTX went bankrupt, its asset disposal has been underway. On the one hand, all kinds of crypto assets held are sold in an orderly manner. According to relevant court documents, as of August 31, FTX held $3.4 billion worth of crypto assets, such as SOL worth $1.16 billion and BTC worth $560 million. With the ups and downs of the cryptocurrency market in the past two years, the prices of some assets have rebounded, which has enabled FTX to obtain considerable returns when the assets are sold, contributing significantly to the accumulation of cash reserves.
On the other hand, FTX is actively pursuing assets transferred by previous executives. According to the filing, SBF and other executives received $2.2 billion in cash, cryptocurrency, equity and real estate in the months leading to FTX's bankruptcy. Through legal means, FTX strives to reclaim these assets and incorporate them into the scope of assets that can be allocated to creditors, enriching cash reserves.
In addition, FTX reached a settlement agreement with some institutions, which also helped the return of funds. For example, in August 2024, FTX and the U.S. Commodity Futures Trading Commission (CFTC) reached a $12.7 billion settlement, and the CFTC agreed that as long as FTX complies with the restructuring plan, no compensation would be collected, allowing FTX to use more funds to repay debts.
As the end of May approaches, the implementation of the FTX debt repayment program enters the countdown. The source of the $11.4 billion cash reserves is gradually becoming clear, and the impact of this debt repayment action on the cryptocurrency market has also attracted much attention. Whether it will trigger a new round of market fluctuations, how creditors will use this fund, and whether it will reinvest in the crypto market, everything will be answered. The cryptocurrency market will continue to focus on the subsequent development of this important event.
