FTX is set to repay its European creditors, with compensation set at prices from when the exchange collapsed in 2022. Eurozone traders will be reimbursed in euros, but the repayments will come with a significant 30% processing fee. These payments will be based on the value of the assets at the time FTX shut down.
The repayment process is expected to begin once the Cyprus Securities and Exchange Commission approves, allowing client accounts to be unlocked. Some early payments may start as soon as next week. FTX has already emailed EU creditors and provided access to a portal where they can check their remaining balances. Currency risk is a factor in these repayments, meaning the value of payments in euros may fluctuate.
Discounted crypto prices for FTX repayments
FTX has outlined a repayment structure that compensates crypto holders at rates significantly lower than current market prices. Bitcoin (BTC) will be repaid at $16,486.31, while Ethereum (ETH) holders will receive $1,241.45 per ETH. Solana (SOL) users will be repaid at a much lower rate of $15.11 despite the asset’s market price being almost ten times higher.
These discounted rates are part of FTX’s liquidation strategy, which allowed the exchange to benefit from the market during the liquidation of some positions. Despite this, top account holders, including those with over $221 million, may still see a significant shortfall in their compensation. There are also concerns that some accounts might need more proper documentation to verify their holdings.
Volatile token holders see favorable returns
While many FTX creditors face discounted payouts, some riskier token holders receive favorable compensation. For instance, Serum (SRM) holders will be repaid at $0.19 per token, even though the market price is just $0.03. Similarly, SushiSwap (SUSHI) users will get $1.11 per token, compared to its current value of $0.76.
Other beneficiaries include ApeCoin (APE) holders, who will be compensated at $2.88, while the market price is $0.68. EnjinCoin (ENJ) holders will also see a payout of $0.33, more than double its current price of $0.15. On the other hand, Polygon (MATIC) holders will be compensated at $0.85, while its current market value hovers around $0.37.
FTT token surges amid repayment news
The FTT token, linked to FTX, has seen a recent surge in trading activity following rumors of imminent repayments. The token’s price jumped 50% overnight, rising to $2.41 from a low of $1.41 at the end of September. Despite the rally, FTT remains far from its peak price of over $77. The token’s market depth is limited, making it prone to sharp price swings.
FTX is expected to disburse around $12 billion, though additional fees and expenses could push the total figure to over $16 billion. Bankruptcy-related fees alone may reach up to $1.45 billion over the two-year process, potentially exceeding the amount needed to compensate some creditors.
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