- Crypto analyst who predicted FTX‘s downfall views the two-year timeline for creditor repayments as unexpectedly swift given the complexity of the case.
- Under FTX’s recovery plan, 98% of creditors are expected to receive at least 118% of their claim value in cash, with the first payments initiated February 18, 2025.
- Early warning signs included fallout from the Terra Luna collapse and the premature departure of FTX US President Brett Harrison before his equity vested.
The crypto industry is witnessing an unexpectedly swift resolution to the FTX bankruptcy saga, according to the analyst who correctly predicted the exchange’s collapse. Ishan Bhaidani, co-founder of crypto marketing firm SCRIB3, expressed surprise that creditor repayments began just over two years after what is considered one of the biggest financial frauds in US history.
"I thought it would take longer, just because there’s so many jurisdictional issues, you’re working with so many different governments, different levels of enforcement, different levels of compliance," Bhaidani told Cointelegraph in a February 28 interview at ETHDenver.
The multinational nature of FTX’s operations complicated the bankruptcy proceedings, with regulatory complexities spanning the Bahamas and the United States. Despite these challenges, Bhaidani characterized the two-year timeline as "kind of a win" for creditors.
FTX initiated its first repayment round on February 18, 2025, with a second distribution scheduled for May 30. Creditors eligible for the second round must verify their claims by April 11. The company’s recovery plan projects that 98% of creditors will receive at least 118% of their claim value in cash.
The exchange collapsed in November 2022 after illegally diverting customer funds to its sister trading firm Alameda Research. When market prices declined, the resulting liquidity crisis prevented customers from withdrawing their funds, ultimately forcing the company into Chapter 11 bankruptcy on November 11, 2022.
Bhaidani, who gained recognition for his 20-part analysis on X that predicted FTX’s downfall a month before it happened, noted that some distressed debt investors may have profited significantly from purchasing creditor claims at discounted rates.
"If you were taking $0.25 on the dollar and buying Bitcoin at $18,000, $20,000, $30,000 you did pretty well, right? You bought ETH, you didn’t do as well. You bought SOL? You did really, really freaking well," Bhaidani explained.
In his interview, Bhaidani highlighted key warning signs that led to his accurate prediction, including the collateral damage FTX suffered from the $60 billion Terra Luna ecosystem collapse. He also found it suspicious that former FTX US President Brett Harrison departed the company before his equity vested.
"He doesn’t even hit his vest on a $32 billion company… we’re talking about hundreds of millions of dollars in potential equity, why is he leaving without vesting? Something has to be wrong in the kitchen over there," Bhaidani recounted.
When asked about former FTX CEO Sam Bankman-Fried’s 25-year prison sentence, Bhaidani estimated only a 2% to 5% chance of a pardon, noting it would be even less likely under the current Trump administration.
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