FTX to Begin Next Round of Creditor Repayments on September 30




FTX, the cryptocurrency exchange that collapsed in late 2022, is set to commence its next phase of creditor repayments. A U.S. court has approved the release of $1.9 billion in cash, with distributions scheduled to begin on or around September 30, 2025. This development marks a significant step forward for thousands of creditors who have been awaiting restitution for nearly three years.

Court Approval and Fund Release
The recent court decision played a crucial role in enabling this upcoming distribution. The U.S. Bankruptcy Court in Delaware approved a reduction in FTX’s disputed claims reserve, lowering it from 6.5billionto6.5 billion to 6.5billionto4.3 billion. This adjustment freed up 1.9billionincash,whichwillnowbedistributedtoqualifiedcreditors.ThisapprovalfollowsthebroaderreorganizationplanconfirmedinOctober2024,whichaimstorepayupto1.9 billion in cash, which will now be distributed to qualified creditors. This approval follows the broader reorganization plan confirmed in October 2024, which aims to repay up to 1.9billionincash,whichwillnowbedistributedtoqualifiedcreditors.ThisapprovalfollowsthebroaderreorganizationplanconfirmedinOctober2024,whichaimstorepayupto16.5 billion, including full principal and 9% interest for most non-governmental creditors.

Distribution Process and Eligibility
FTX’s Distribution Service Providers, including BitGo, Kraken, and Payoneer, will facilitate the payouts. To be eligible for this round of repayments, claimants must complete know-your-customer (KYC) verification, submit necessary tax forms, and ensure they are properly registered by the record date of August 15, 2025. The distribution will target holders of approved Class 5 (Customer Entitlement Claims), Class 6 (General Unsecured Claims), and certain Convenience Claims.

Ongoing Challenges and Creditor Dissatisfaction
Despite the positive progress, challenges persist. Payouts remain restricted in certain regions due to legal and regulatory concerns, with China and Russia alone accounting for approximately $470 million in claims. Some creditors in these jurisdictions are reportedly considering legal action over these exclusions.
Furthermore, a significant point of contention among creditors is the valuation method used for repayments. FTX is basing claims on the value of crypto assets at the time of its bankruptcy in November 2022. At that time, Bitcoin traded between 16,000and16,000 and 16,000and20,000. Given Bitcoin’s current value of around 120,000andsubstantialgainsinotheraltcoins,manycreditorsfeelshortchanged.Theyarguethattheyshouldberepaidbasedoncurrentmarketvalues,citingFTX’sowntermsofservice.However,thebankruptcycourthasconsistentlyupheldtheoriginaldollar−basedvaluationmodel.WhileFTXhasrecoveredasubstantial120,000 and substantial gains in other altcoins, many creditors feel shortchanged. They argue that they should be repaid based on current market values, citing FTX’s own terms of service. However, the bankruptcy court has consistently upheld the original dollar-based valuation model. While FTX has recovered a substantial 120,000andsubstantialgainsinotheraltcoins,manycreditorsfeelshortchanged.Theyarguethattheyshouldberepaidbasedoncurrentmarketvalues,citingFTX’sowntermsofservice.However,thebankruptcycourthasconsistentlyupheldtheoriginaldollar−basedvaluationmodel.WhileFTXhasrecoveredasubstantial16.5 billion, it is important to note that nearly all customer-held crypto was lost by the time of bankruptcy, with only a minuscule fraction of Bitcoin (0.1%) and Ethereum (1.2%) reportedly available.

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