FTX distributes a further $5 billion to eligible claimants
Upcoming FTX Creditor Distribution: What You Need to Know
Get ready, FTX creditors! The anticipated second distribution is rolling out on May 30, 2025, with a whopping $5 billion up for grabs. Here's what you need to know about the upcoming payout.
FTX's Big Payout
FTX Trading Ltd. and the FTX Recovery Trust have announced the upcoming distribution via a press release on May 15. This second distribution is part of the collapsed crypto exchange's Chapter 11 reorganization plan and will be allocated to creditors with allowed claims.
Distribution Criteria
Eligible creditors belong to both the Convenience and Non-Convenience classes, provided they have completed all prerequisite steps for the distribution. Only claimants with approved claims under the bankruptcy plan will receive payouts. To secure their shares, participants must onboard with a Distribution Service Provider—either BitGo or Kraken. Failing to do so will result in creditor exclusion from direct payments from FTX.
Timeline and Providers
The distribution will commence on May 30, 2025, with payments expected to arrive within 1 to 3 business days following the start date. This payout represents the first wave of non-convenience class payments and suggests progress in the bankruptcy settlement process. Further distribution dates will be announced as the process unfolds.
Distribution Breakdown
The distribution percentages by creditor class are as follows:- Class 5A Dotcom Customer Entitlement Claims: 72% distribution- Class 5B U.S. Claims: 54% payout- Digital Asset Loan and General Unsecured Claims: 61% of approved claim amounts- Convenience Claims (Class 7): 120% distribution
Moving Forward
This structured payout marks a significant milestone in FTX's creditor recovery process after the bankruptcy filing in November 2022. The process underscores the efforts to ensure maximal recovery for creditors and efficient resolution of outstanding claims.
The FTX collapse in November 2022 stemmed from fraud perpetrated by convicted company officials, including founder and former CEO Sam Bankman-Fried. Amid the upcoming distribution, the FTX Token (FTT) saw a spike in its value, surpassing 13% and trading up to $1.33.
Sources:[1] FTX's Chapter 11 Plan of Reorganization (www.ftx.com)[3] FTX Press Release - FTX Announces Next Distribution (www.ftx.com)[4] FTX Distribution Procedures (www.ftx.com)[5] Chapter 11 Reorganization Plan (www.yahoo.com)
- To receive a share of the upcoming FTX distribution, eligible creditors must onboard with a Distribution Service Provider, such as Kraken.
- Failing to onboard with a provider will result in creditor exclusion from direct payments from FTX.
- The upcoming payout represents a significant milestone in the FTX creditor recovery process, following the bankruptcy filing in November 2022.
- Amid the upcoming distribution, the FTX Token (FTT) has seen a spike in its value, trading up to $1.33.
- The crypto industry, including players like Coinbase and XRP, closely follows the developments in FTX's Chapter 11 reorganization plan and distribution process, as it sheds light on the future of the digital asset business and technology in finance.
