FTX creditors may face a significantly lower real recovery rate for their crypto assets, despite a planned 143% fiat repayment. This assessment comes from creditor representative Sunil, who highlights the substantial discrepancy caused by the surge in Bitcoin, Ether, and Solana prices since the exchange's collapse in 2022.

In a recent X post, Sunil estimated the real crypto recovery rate for FTX creditors to range between 9% and 46%, noting that the actual value could be even lower given the appreciation of major cryptocurrencies.

"FTX creditors are not whole," Sunil stated, arguing that the projected 143% fiat payout does not accurately reflect losses in crypto-denominated terms.

Data shared by Sunil illustrates the valuation gap:

  • Bitcoin's petition price was $16,871, in contrast to its current price exceeding $110,000. This implies that a 143% fiat payout equates to approximately 22% of Bitcoin's real value.
  • Similarly, a 143% recovery for Ether translates to 46% in real terms.
  • For Solana, the real recovery rate is estimated at only 12%.

Furthermore, Sunil pointed to potential "extra recovery" through airdrops from external projects targeting FTX creditors, citing Paradex as an example. He suggested that "FTX creditors are the most valuable asset and attractive for projects."

The distribution of payments to FTX creditors has commenced:

  • The first round of payments for claims under $50,000 was disbursed on February 18, totaling $1.2 billion.
  • In May, the FTX Recovery Trust initiated its second payout of $5 billion, covering various claim categories, including Dotcom Customer Entitlement Claims (72%), US Customer Entitlement Claims (54%), and Convenience Claims (120%).
  • General Unsecured and Digital Asset Loan Claims are slated to receive 61% distributions, with funds expected to reach recipients via Kraken and BitGo within one to two business days.

Meanwhile, former FTX CEO Sam Bankman-Fried, currently serving a 25-year prison sentence, is scheduled for an appeal hearing at the US Court of Appeals for the Second Circuit on November 4. His legal team filed the appeal in September 2024, asserting that he was "never presumed innocent" and that prosecutors misrepresented the handling of FTX customer funds. The appeal challenges his 2023 conviction on seven felony counts.