FTX Creditor Recovery Slashed to 9–46% Despite 143% Fiat Plan
FTX creditor recovery is set to deliver only 9–46% of claimants’ original holdings when adjusted for current crypto prices. This contrasts with the 143% fiat payout plan. The first US$1.2 billion distribution for claims under US$50 000 was completed in February. A US$5 billion second round began in May. At today’s rates, a 143% fiat payout covers only 22% of BTC, 46% of ETH and 12% of SOL. This FTX creditor recovery shortfall underscores the challenge of volatile crypto valuations. Creditors can seek extra recovery through airdrops from projects like Paradex. Sunil Kavuri warns that rising crypto prices since FTX’s bankruptcy filing and scams may further erode real returns. The bankruptcy plan relies on over US$15 billion recovered from reserves, clawbacks and token sales. Meanwhile, Sam Bankman-Fried’s appeal hearing is set for November 4. Traders should monitor potential sell pressure from large token distributions.
Bearish
The reduced effective recovery percentages in BTC, ETH and SOL terms, due to high crypto prices and significant token distributions, may prompt creditors to sell recovered tokens, increasing supply and exerting downward price pressure. In the short term, large distributions and uncertainty around recovery could trigger sell-offs. Over the long term, the completion of payouts and stabilized recovery processes may neutralize some pressure, but the initial impact is likely bearish.