FTX Distributes $1.9B to Creditors by Sept. 30, 2025 Following Court-Approved Disputed Claims Cut

FTX has announced a $1.9 billion distribution to creditors, set to commence on September 30, 2025, following a court-authorized reduction of disputed claims. The U.S. bankruptcy court approved the release of $1.9 billion in funds previously reserved for unresolved claims, lowering the disputed claims reserve from $6.5 billion to $4.3 billion. This third round of repayments will target eligible claim holders verified by an August 15 record date, with payments processed through third-party platforms including BitGo, Kraken, and Payoneer [1]. The move marks a significant step in the cryptocurrency exchange’s restructuring process, though challenges remain regarding unresolved legal disputes and jurisdictional restrictions.

The distribution will prioritize fifth- and sixth-tier creditors, with larger claims exceeding $50,000 receiving partial disbursements. However, creditors in China and other jurisdictions flagged in a court motion are likely excluded, as their claims have not yet been validated. Sunil Kavuri, an FTX creditor, noted that the August 15 deadline makes it “nearly certain” these jurisdictions will remain outside the current payout, pending a resolution of the contested motion [2]. The court has yet to finalize a framework for reclassifying restricted jurisdictions, leaving uncertainty for affected stakeholders.

The court’s approval of the reserve reduction reflects months of legal negotiations and stakeholder objections. While the decision accelerates repayments, it also highlights the complexity of crypto-related insolvencies, where claim validity and asset valuations often remain contested. Analysts observe that the $1.9 billion allocation prioritizes smaller claimants, while larger institutions face a slower repayment timeline [3]. The use of third-party processors underscores efforts to streamline operations, but stringent KYC requirements risk excluding unverified users, potentially delaying disbursements for some creditors.

The ongoing dispute over restricted jurisdictions remains unresolved. A July 22 court hearing sought to address a motion freezing payments to 49 jurisdictions, but the court directed the FTX estate to revise the proposal, emphasizing the need for a “clear method” to reclassify jurisdictions. Creditors and legal experts argue the motion lacks feasibility, citing concerns over seizing funds without due process [4]. The FTX estate has requested additional time to address 90 objections, with a formal ruling yet to be delivered.

Despite these hurdles, the $1.9 billion payout represents progress in stabilizing FTX’s repayment framework. By resolving $2.2 billion in disputed claims since mid-2025, the trust has freed liquidity for phased distributions. However, with $4.3 billion in claims still under dispute, full repayment for all stakeholders could span years. The court’s role in balancing competing interests—creditor rights, regulatory compliance, and operational efficiency—remains critical to the process.

The exclusion of certain jurisdictions and institutions underscores the legal and political sensitivities surrounding FTX’s collapse. Governments and regulatory bodies may continue to negotiate separately, prolonging their recovery timelines. Meanwhile, the trust’s focus on core repayments reflects a pragmatic approach to managing the bankruptcy process, though stakeholders must remain vigilant about potential delays and the need for continued judicial oversight to ensure equitable outcomes [5].

[1] [FTX to Pay Creditors $1.9B After Claim Dispute Cut](https://cointelegraph.com/news/ftx-distribute-1-9-billion-court-approval-cut-disputed-claims)

[2] [FTX to Begin $1.9B Distribution to Creditors by September](https://www.fxleaders.com/news/2025/07/24/ftx-to-begin-1-9b-distribution-to-creditors-by-september-30-2025/)

[3] [FTX Recovery Trust Reduces Disputed Claims Reserve by $2.2B](https://www.ainvest.com/news/ftx-recovery-trust-reduces-disputed-claims-reserve-2-2b-release-1-9b-creditors-payouts-sept-30-2507/)

[4] [FTX Sets Next Distribution Date Following Disputed Claims Reserve Reduction](https://www.prnewswire.com/news-releases/ftx-sets-next-distribution-date-following-disputed-claims-reserve-reduction-302512444.html)

[5] [FTX to Begin Next Round of Cash Payouts After Claims Dispute](https://cryptonews.com/news/ftx-to-begin-next-round-of-cash-payouts/)