FTX Refunds $5 Billion: Is It Enough to Erase the Stains of the Past?

How is FTX trying to recover from bankruptcy?

FTX currently has $11.4 billion in cash, enough to cover its debts, but the pressure of 9% annual interest rates forced it to act quickly. The second repayment is aimed at creditors in “Group 5: Customer Interest” and “Group 6: General Unsecured Creditors” with claims over $50,000. Creditors must complete KYC and file tax forms by April 11, 2025. Kraken and BitGo – two reputable platforms – are assisting with the distribution, which is expected to take 1-3 business days.

However, the payment method is highly controversial. The repayments are based on the value of assets at the time of bankruptcy (November 11, 2022), when Bitcoin was worth only about $16,000. With BTC currently around $83,000, creditors who receive cash will lose out on a large profit. Sunil Kavuri, a representative of the group of creditors, called it a “bitter end,” but still a step forward from the risk of being left with nothing.

How does the FTX incident compare to other crises in the crypto industry?

The crypto industry has had its fair share of trust-shattering incidents. In May 2025, Coinbase suffered a data breach when hackers bribed an outsourced employee, causing $400 million in losses. Ledger was also hacked on Discord, with a link to a fake recovery phrase being leaked to users. Compared to these incidents, FTX left a bigger financial toll ($12.7 billion in total debt) and a deeper psychological scar, due to allegations that Sam Bankman-Fried misappropriated $8 billion in customer assets.

But FTX stands out in its recovery efforts. While Coinbase offered a $20 million bounty to find the culprit, FTX pumped $5 billion directly into the hands of creditors. BitGo, an FTX partner, has cemented its reputation with a MiCA license in the EU, serving 63 banks dealing with crypto. The contrast illustrates a polarized crypto industry: from governance failures to steps to restore trust.

How will this refund impact the crypto market?

The $5 billion has the potential to shake up the crypto market, which has been depressed by fears of a U.S. recession. According to K33 Research, about $2.4 billion from the repayment could be reinvested in crypto, boosting liquidity and bullish sentiment for Bitcoin and altcoins. But the actual impact is limited, as 33% of the debt is owed to parties that do not meet KYC requirements or are located in sanctioned countries.

The controversy over fiat payments instead of crypto is fueling FUD on platforms like X. Many creditors are demanding payment in Bitcoin or Solana to reflect current valuations, but assets have already been liquidated, making this unlikely. If FTX mismanages expectations or has a delivery problem, negative sentiment could spread, affecting the entire market.

Can FTX Rebuild Trust in the Crypto Industry?

The repayment is a big step forward, showing that the crypto industry can recover from shocks. The partnership with Kraken and BitGo, along with a commitment to transparency, helps FTX improve its image. But with the likes of Coinbase and Ledger continuing to erode trust, FTX faces a double burden: satisfying creditors and convincing the community.

Europe, with 63 crypto trading banks and the MiCA regulatory framework, sets a high bar for security and accountability. FTX, which does not operate in the EU, is under indirect pressure as investors prefer regulated platforms. To overcome the controversy, FTX needs to be more transparent and avoid any errors in the reimbursement process.

Can FTX write a new chapter?

With $5 billion, FTX is trying to close a dark chapter. But money can’t erase lingering doubts. If they handle it well, they could inspire the crypto industry, proving that recovery is possible. But if they stumble, FTX will reinforce the stereotype that crypto is a risky game. Can they rewrite their story? Their next move will be everything.