FTX Announces $5 Billion Repayment Plan for Creditors On May 30

FTX Trading Ltd., along with the FTX Recovery Trust, has confirmed that it will begin its second round of distributions to eligible creditors on May 30, 2025. The distribution will be carried out under the company’s Chapter 11 Plan of Reorganization and will involve payments totaling more than $5 billion. FTX $5 Billion Repayment Plan for Creditors A press release published on May 15 reported that the FTX Recovery Trust will pay out funds to creditors who have allowed claims through the Plan. If a creditor in the Convenience or Non-Convenience class completed the onboarding with a chosen Distribution Service Provider, they will be eligible for the payout. Some of the companies offering distribution services include Bitgo and Kraken. The announcement comes as part of the company’s continuing effort to resolve bankruptcy claims following its 2022 collapse. The distribution is expected to reach eligible recipients within 1 to 3 business days after May 30, depending on the service provider. Customers have agreed to receive their payments through these third-party services and will not receive distributions directly from FTX. Distribution Details Across Claim Classes FTX has stated that different creditor classes will receive various percentages based on claim type and the priorities defined in the reorganization plan. According to the announcement, Allowed Class 5A Dotcom Customer Entitlement Claims will receive a 72% distribution. Meanwhile, Allowed Class 5B U.S. Customer Entitlement Claims are set to receive 54%. Additionally, Allowed Classes 6A and 6B, covering General Unsecured Claims and Digital Asset Loan Claims, will both receive 61%. Class 7 Convenience Claims that meet the required conditions will be paid at a higher rate of 120%. This increased payout for Convenience Claims is in line with the plan’s approach to fully settle smaller claims. Asset recovery actions like company asset sales, recouped financial resources, and the outcome of claims helped provide these distributions. These recovery efforts have been coordinated under the oversight of the FTX Recovery Trust and its legal and financial advisors. Administrator Statement and Recovery Strategy John J. Ray III, the Plan Administrator for the FTX Recovery Trust, commented on the progress. “These first non-convenience class distributions are an important milestone for FTX,” he said. He also noted the scale of the distribution process, which involves thousands of claimants and complex procedures. Ray added that the team’s focus continues to be on pursuing remaining assets and resolving pending claims. “The scope and magnitude of the FTX creditor base makes this an unprecedented distribution process,” he said. The administrator reaffirmed the Trust’s commitment to further recoveries through legal and financial action. The company has recently launched new lawsuits against token issuers and other parties holding assets linked to FTX. These efforts are intended to reclaim funds still tied up in third-party hands and will contribute to future creditor distributions. ✓ Share: Kelvin Munene Murithi Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates. Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss. Source: https://coingape.com/ftx-announces-5-billion-repayment-plan-for-creditors-on-may-30/