In the aftermath of the collapse of FTX, what once appeared to be a fairly generous repayment plan for creditors is now being re-evaluated in light of soaring cryptocurrency prices. Although FTX’s liquidation plan technically offers up to ~143% in fiat value, many creditors and analysts now believe that the real recovery in terms of cryptocurrency value may only amount to about ~9%. Below is a breakdown of how we arrived at that figure, the key factors at play, and what it means for affected parties.
1. The repayment framework
After FTX filed for bankruptcy, the plan proposed that non-governmental creditors would receive 100% of their original claim amounts (in USD terms at the time of filing) plus interest.
However, the values of the underlying cryptocurrencies have since risen dramatically. According to data cited by creditor representatives, this means the payout denominated in crypto is far less generous than the headline figure suggests.
2. How “9%” comes into play
A creditor representative named Sunil Kavuri (often referenced simply as “Sunil”) noted on social media that although the repayment payout is framed at ~143% in fiat, when translated back into the current value of cryptocurrencies (such as Bitcoin or Ether), the real recovery rate looks like only 9% to 46%, depending on the crypto.
For example:
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Bitcoin petition price was ~$16,871, but currently exceeds $110,000: so a payout of 143% in fiat equates to only ~22% of the current Bitcoin value.
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For tokens like Solana, the recovery in crypto-terms may be as low as ~12%.
Hence, when factoring the current crypto valuations, the “~9%” figure emerges as a worst-case estimate.
3. Key reasons for the shortfall
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Baseline valuation issue: The repayment plan uses the value of assets at the time of bankruptcy (or some earlier date). Because the crypto market has since rallied, creditors who held actual crypto suffer from an opportunity cost.
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Crypto price inflation: With Bitcoin and other major coins having surged post-collapse, the USD-based repayment doesn’t keep pace when converted back into crypto.
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Distribution timing and structure: Even if fiat repayments are made, the actual conversion into crypto or the ability to hold equivalent crypto may be constrained, meaning the real value to creditors is less than the headline amounts.
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Airdrops and additional recovery: Some value might be recovered via external token airdrops targeted at FTX creditors. Sunil mentioned that these may offer “extra recovery,” but such airdrops are speculative and not guaranteed.
4. Implications for creditors and investors
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If you are a creditor of FTX, it is important to understand that while you may get the full nominal USD amount of your claim (plus interest), you probably will not recover the equivalent amount of crypto you originally held.
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For crypto-holders who think in terms of tokens rather than fiat, this means a significant real loss even after repayment.
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This situation highlights the risk of crypto price volatility and the importance of measuring recovery not just in fiat terms but in crypto terms (if that was the original exposure).
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Potential upside: If you believe in the long-term value of the coins, a partial recovery plus subsequent appreciation could help offset losses, but there are no guarantees.
5. Closing thoughts
The headline figure of “143% repayment” for FTX creditors sounded promising. But when adjusted for the reality of today’s elevated crypto prices, actual recovery in token terms may amount to as little as ~9% in certain cases.
This underscores a broader lesson: in the crypto market, when tokens appreciate significantly, recoveries calculated in fiat can mask the deeper losses experienced by investors who held coins directly. Creditors – and indeed all crypto investors – should factor in not just the nominal numbers but also the crypto-adjusted value of any repayment plan.
Conclusion: The real takeaway is that while the FTX liquidation plan may look generous at first glance, the timing of valuations and subsequent crypto price appreciation mean many creditors will likely recover only a small fraction (possibly ~9%) of what they would have had if they had held onto their crypto. Investors should therefore carefully scrutinize any plan that uses fixed USD claims in a world of dynamic crypto asset prices.
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