FTX to Begin Second Round of Creditor Payouts, $5 Billion Set for Distribution

Bankrupt crypto exchange FTX is preparing to launch its second round of creditor repayments on May 30, with over $5 billion set to be distributed to eligible claimants, the company’s estate announced on Thursday. Payments will be processed through BitGo or Kraken, and recipients can expect funds to arrive within one to three business days, depending on the chosen provider. The new distribution follows the initial round in February, which focused on creditors with claims under $50,000. This second phase will repay those with larger claims as part of FTX’s broader bankruptcy proceedings under CEO John Ray III . Bloomberg previously reported that FTX has earmarked around $11.4 billion to settle creditor claims, though repayments are tied to digital asset prices as of the bankruptcy filing date in November 2022—well below current market levels. Recovery rates vary based on claim category. Customers on the former dotcom platform will receive 72 percent of their approved claims, while U.S.-based customers are expected to recover 54 percent. General unsecured creditors and digital asset loan claimants are each set to receive 61 percent. Those with convenience claims, which typically involve smaller amounts and simplified procedures, will recover 120 percent—effectively receiving full repayment with a small premium. FTX CEO John Ray III called the milestone a major step forward, noting the complexity and scale of the repayment process. He credited the progress to the efforts of the estate’s legal, financial, and forensic teams, who have spent more than a year tracing assets , coordinating with global stakeholders, and untangling the exchange’s deeply flawed accounting records. To qualify for payment, creditors must complete several onboarding steps through the FTX Customer Portal. These include identity verification under Know Your Customer (KYC) rules, submission of tax documents, and registration with either BitGo or Kraken as their distribution agent. Customers who choose a provider will not receive payments directly from FTX; instead, distributions will be handled entirely by their selected platform. FTX filed for bankruptcy in November 2022 following revelations of widespread misuse of customer funds. Its founder and former CEO, Sam Bankman-Fried, was later convicted on multiple fraud charges and is awaiting sentencing. The bankruptcy estate has since worked to recover billions in assets from seized funds, clawbacks, and liquidations in an effort to compensate the exchange’s extensive creditor base.