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FTX Set to Distribute $1.6 Billion to Creditors in Third Major Payout

The FTX Recovery Trust is preparing to disburse approximately $1.6 billion to creditors on September 30th, marking the third significant distribution since the cryptocurrency exchange's collapse in November 2022. This latest payout aims to further recover assets for users affected by the implosion that sent shockwaves through the crypto industry.

Key Takeaways

  • FTX will distribute $1.6 billion to creditors starting September 30.
  • This is the third major payout from the bankruptcy estate.
  • U.S. customers will receive 40% in this round, bringing their total recovery to 95%.
  • "Dotcom" customers will see an additional 6% payout.
  • General unsecured and digital asset loan claims will receive 24%.
  • Convenience claims will be paid at 120% of their value.

Third Tranche of Distributions

The FTX Recovery Trust, responsible for managing the bankruptcy proceedings, announced that the funds will be sent to creditors who have completed the verification process on the FTX claims portal. Payments are scheduled to commence on September 30 and are expected to reach recipients' accounts within three business days, facilitated by service providers such as BitGo, Kraken, and Payoneer.

Payout Percentages by Creditor Type

This distribution includes varying percentages for different creditor groups:

  • U.S. Customer Claims: Will receive 40% in this round, increasing their cumulative recovery to 95% of their original claim.
  • "Dotcom" Customers: These users of FTX's international platform will receive an additional 6% payout, bringing their total distributions to 78%.
  • General Unsecured and Digital Asset Loan Claims: These claims are set for a 24% payout, raising their total recovery to 85%.
  • Convenience Claims: These creditors will be reimbursed at 120% of their claim's face value, exceeding the amount originally owed.

Previous Payouts and Future Outlook

This $1.6 billion distribution follows two previous major payouts. The first, in February, amounted to $1.2 billion, and the second in May distributed $5 billion. The FTX Recovery Trust holds an estimated $16.5 billion in assets designated for creditors and former customers. The ongoing recovery process is closely watched by the crypto market for potential impacts.

Meanwhile, FTX founder and former CEO Sam Bankman-Fried is currently serving a 25-year prison sentence after being convicted on seven counts of fraud and conspiracy in November 2023. His legal team is preparing to appeal his conviction in November, arguing that he did not receive a fair trial and that FTX was solvent at the time of its collapse.

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