By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

FTX’s Bahamian liquidators are “shooting for” February 18 as the date to start payouts to small creditors and victims owed less than $50,000 as a result of the crypto exchange’s fraud-driven implosion.

Tribune Business has confirmed that Brian Simms KC, the Lennox Paton attorney and senior partner, and his fellow FTX Digital Markets liquidators, the PricewaterhouseCoopers (PwC) accounting duo, Kevin Cambridge and Peter Greaves, have informed creditors in the so-called “convenience” class that this is the date when many will start to recover their assets.

“They’re shooting for February 18th,” one well-placed source, speaking on condition of anonymity, said of the liquidators for FTX’s former Bahamian subsidiary. This newspaper understands that persons in the “convenience” class group account for around 80 percent of all FTX Digital Markets creditors, but the timing of their payout will depend on whether they have fulfilled Know Your Customer (KYC) and other conditions.

International reports have suggested that these early-payout creditors, representing the bulk or greatest volume of FTX Digital Markets claims, could recover sums equivalent to 118 percent of what they were owed when the Securities Commission placed the crypto exchange into Supreme Court-supervised liquidation in early November 2022. The payment process could extend to March 4, 2025.

The fact they will recover more than they are owed is because 9 percent interest has been accumulating on their asset principal since that date. The February 18 payout date is also consistent with the timeline unveiled by the FTX Digital Markets liquidators in their January 2025 statement, which confirmed they had reached an agreement with BitGo that will see the latter distribute recoveries to former customers and other creditors.

“Eligible customers/creditors in supported jurisdictions will be invited to create a Bitgo ‘Go’ account and receive their distribution in US dollars fiat into this account. Go accounts can be used to store US dollars or other digital assets using a qualified custody model through Bitgo Trust Company,” the FTX Digital Markets liquidators added.

“They also connect directly to BitGo’s Go network, connecting users to other enterprises, platforms and exchanges, enabling a secure and instant way to allocate, trade and settle assets. Distributions for convenience class customers/creditors satisfying pre-distribution requirements will commence from February 2025, with distributions to non-convenience class customers/creditors expected to commence in the second quarter of 2025.”

Mr Simms, in an August 15, 2024, affidavit filed with the Supreme Court, asserted that FTX’s former creditors and customers will enjoy “a remarkably favourable outcome” via a multi-billion interest gain while recovering all their principal. He added that the 9 percent interest applied following FTX’s November 2022 collapse could result in a $2bn collective gain for victims through to October 31, 2024.

And Mr Simms also disclosed that victims could enjoy a further collective $800m gain from interest continuing to be paid at 9 percent from end-October until their claims are paid in full. That would make for a total $2.8bn gain, in addition to the anticipated $11.2bn in claims accepted by both Mr Ray and the Bahamian liquidators.

“The joint official liquidators believe that payment of post-petition interest on accrued eligible Digital Markets customer claims and Digital Markets non-customer claims is a remarkably favourable outcome for creditors and customers,” Mr Simms asserted.

“Assuming that the effective date of the plan is October 31, 2024, and the total estimated amount of allowable creditor claims is approximately $11.2bn, the post-petition interest payment could provide approximately $2bn of incremental value to creditors through to the effective date of the plan.

“After the effective date, creditors would continue to earn 9 percent interest on the unpaid portion of their claims from the petition date until paid in full, resulting in approximately $0.8bn ($800m) of incremental value to creditors.”

FTX’s Bahamian liquidators, in earlier advice distributed to creditors, estimated that so-called ‘convenience class’ customers would recover sums equal to 119 percent of the value of their approved claim. n the case of larger victims, who wait longer to receive their payout, this was forecast to rise to between 129 percent to 143 percent.

“These customers will receive a one-time, full and final distribution equivalent to 100 percent of their reconciled claim value based on the conversion rates as at 11 November, 2022, approved by the Bahamas Court, and an amount representing post-petition interest of 9 percent per annum on the reconciled claim value from the reference date of 11 November, 2022, through the applicable distribution date,” the Bahamian liquidators said of ‘convenience’ claims.

“The joint official liquidators currently estimate that this will amount to a payment of approximately 119 percent of the reconciled claim value for convenience class customers.”

As for those owed more than $50,000, they added: “At present, the joint official liquidators currently estimate that this will amount to a payment of approximately 129-143 percent of the reconciled claim value for non-convenience class customers of FTX. com.

“Distributions will be made via selected payment processors or crypto currency exchanges and service providers. We expect to offer retail customers a choice between short listed distribution agents. NFTs (non-fungible tokens will be returned to customers (where available) via a transfer to a selected wallet address.”