Court Approves $1.9B FTX Creditor Payout by Sept 30 2025

FTX has secured court approval to distribute $1.9 billion to creditors by September 30, 2025, following a Delaware bankruptcy court’s reduction of its disputed claims reserve [1]. The payout, administered through BitGo, Kraken, and Payoneer, marks the third major disbursement to verified creditors as part of the FTX Recovery Trust’s restructuring process. Eligible claimants must have completed Know-Your-Customer (KYC) verification by August 15 to qualify for the distribution [3]. This action reflects the court’s strategy to expedite returns to creditors while balancing disputes over unresolved claims [4].

The distribution targets verified Class 5, Class 6, and Convenience Claim holders, including retail and institutional investors with validated claims. Unsecured creditors without finalized dispute resolutions remain in a separate category pending further rulings [5]. The court’s decision to release $1.9 billion from the reserve—initially set aside to cover unresolved claims—accelerates liquidity for verified stakeholders, reducing the reserve by half. The move underscores the judiciary’s role in overseeing crypto bankruptcy proceedings, where regulatory challenges often complicate traditional recovery timelines.

Market participants have observed mixed reactions to the announcement. While some view the payout as a step toward restoring trust in crypto’s bankruptcy frameworks, others highlight that the $1.9 billion represents a fraction of FTX’s total liabilities. The liquidation of assets to fund the distribution could influence cryptocurrency liquidity, particularly for tokens previously held in FTX’s estate. Historical precedents suggest such distributions may temporarily pressure token valuations as fiat conversions occur [5].

The FTX case highlights the complexity of crypto insolvencies, where asset digitization and decentralized structures complicate claim verification and fund transfers. The court’s oversight has ensured compliance with creditor rights, a critical factor in an industry historically lacking robust governance. As the September 30 deadline approaches, operational execution—accurate claim verification and timely transfers—will determine the credibility of the recovery process. Any delays or disputes in this final phase could undermine stakeholder confidence [5].

The distribution aligns with broader efforts to stabilize creditor interests amid FTX’s ongoing bankruptcy. By prioritizing verified claims and maintaining judicial supervision, the court aims to set a precedent for future crypto insolvencies. The outcome may shape perceptions of asset recoverability in digital markets, particularly as regulators refine frameworks for handling crypto bankruptcies.

Sources: [1] [Court approves $1.9B reserve release for FTX creditor payout](https://www.ainvest.com/news/court-approves-1-9b-reserve-release-ftx-creditor-payout-2507/) [2] [FTX is set to begin creditor payouts on September 30, 2025](https://www.mitrade.com/insights/news/live-news/article-3-981961-20250724) [3] [FTX Sets August 15 Record Date for Next $1.9B Creditor Distribution](https://coincentral.com/ftx-sets-august-15-record-date-for-next-1-9b-creditor-distribution/) [4] [FTX prepares third round of distributions as court frees up reserves](https://cryptobriefing.com/ftx-next-distribution-record-date-september-2025/) [5] [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)