- The repayments will draw around $1.2 billion worth of capital to the first batch of defrauded FTX users.
- As per the repayment scheme the reimbursement will be done based on the crypto prices at the time of bankruptcy.
- The scale of this repayment highlights a significant event in terms of both capital flow and psychological influence on crypto investors.
The Bahamian unit of a crashed crypto exchange FTX, FTX Digital Markets is set to pay again the first group of creditors on Tuesday in an important development for the crypto industry after the crash of around $9 billion of the exchange.
The crash of FTX and over 130 branches introduced a series of bankruptcies that resulted in the longest-ever crypto winter of the industry, which witnessed the price of Bitcoin reach its lowest point at around $16,000.
In a crucial moment for the recovery of the crypto industry, the Bahamas branch of FTX will execute the first batch of repayments for users who are owed not more than $50,000 worth of claims.
The positive indication for the recovery
An X post of FTX creditor Sunil mentioned that users will get their funds at 3:00 pm UTC on Tuesday. The admin is a part of the biggest group of over 1,500 FTX creditors, the FTX Customer Ad-Hoc Committee.
The repayments will draw around $1.2 billion worth of capital to the first batch of defrauded FTX users. The repayments done by FTX are seen as a positive indication of the recovery of the crypto industry, as per Alvin Kan, the COO at a secured digital wallet.
He further went on to add that the repayments of $1.2 billion may witness a crucial part reinvested in cryptocurrencies, possibly influencing market liquidity and prices.
Also, this incident could increase investor sentiment by showing market recovery from the FTX crash, although the sentiment might be mixed because of the payout being grounded on lower 2022 valuations.
He also mentioned that the scale of this repayment highlights a significant event in terms of both capital flow and psychological influence on crypto investors.
The criticism
Regardless of the positive news, some creditors have also condemned the repayment scheme. As per the scheme the reimbursement will be done based on the crypto prices at the time of bankruptcy. Thus, many creditors are criticizing the model because, for example, the price of BTC has skyrocketed over 370% since November 2022.
The public relations manager at Nexo, Magdalena Hristova states that the first FTX repayment shows an important step forward, the capital may only witness a restricted effect on the crypto market. Also, it may not be a market-moving catalyst, but the first FTX spending shows a great victory for justice and complete market sentiment.
