Will FTX's $1.6B Payout Boost or Sink Crypto Markets?

FTX Trading Ltd. and the FTX Recovery Trust have announced the commencement of the third round of creditor distributions under the Chapter 11 Plan of Reorganization, with $1.6 billion allocated for disbursement on September 30, 2025. The funds will be distributed to eligible creditors through BitGo, Kraken, or Payoneer, with settlements expected within 1–3 business days post-distribution. This marks the latest phase in the ongoing recovery process following the 2022 collapse of the cryptocurrency exchange. Creditors must complete pre-distribution requirements, including Know Your Customer (KYC) verification, tax form submission, and onboarding with a designated distribution service provider, to qualify for paymentsFTX Recovery Trust to Distribute Approximately $1.6 Billion to Creditors in Third Distribution on September 30, 2025^[1].

The distribution follows a structured waterfall priority outlined in the reorganization plan. Class 5A Dotcom Customer Entitlement Claims will receive a 6% incremental payout (78% cumulative to date), while Class 5B U.S. Customer Claims will see a 40% distribution (95% cumulative). General Unsecured and Digital Asset Loan Claims (Classes 6A and 6B) will each receive 24% (85% cumulative), and Convenience Claims (Class 7) will be fully repaid at 120% of their original valueFTX Recovery Trust to Distribute Approximately $1.6 Billion to Creditors in Third Distribution on September 30, 2025^[1]. The FTX Recovery Trust has thus far returned over $15 billion to creditors toward an estimated $16.5 billion liability, with this third payout representing one of the largest disbursements in the recovery timeline.

Eligibility for future distributions hinges on compliance with pre-distribution protocols, including ensuring claims are recorded on the official register of claims and objections are resolved within the 21-day notice period. FTX emphasized that funds will only be released to officially registered claim holders, with no exceptions for transferred claims until they are processed and reflected in the court-maintained records. The distribution service providers—BitGo, Kraken, and Payoneer—will handle the disbursement, streamlining the process for creditors while mitigating risks associated with fraudulent activities such as phishing scamsFTX Recovery Trust to Distribute Approximately $1.6 Billion to Creditors in Third Distribution on September 30, 2025^[1].

Market reactions to the payout are mixed, with traders and analysts divided on its potential impact. Some view the injection of $1.6 billion into the market as a catalyst for renewed liquidity in crypto assets, potentially driving momentum in Bitcoin (BTC) and Ethereum (ETH). Others caution that large-scale cash-outs could trigger sell pressure, particularly if creditors prioritize risk mitigation over re-entering volatile marketsFTX $1.6B Creditor Payout Hits Sept. 30; Trader Split on the Impact^[2]. Historical precedents, such as the Mt. Gox repayments, highlight the dual-edged nature of such distributions, where liquidity can either stabilize markets or exacerbate short-term volatilityFTX $1.6B Creditor Payout Hits Sept. 30; Trader Split on the Impact^[2].

The third payout underscores the prolonged nature of FTX’s recovery, with creditors still awaiting full restitution nearly three years after the exchange’s collapse. While the 78–120% repayment rates for different claim classes signal progress, the process remains a testament to the complexity of resolving crypto-related bankruptcies. The FTX Recovery Trust, supported by legal and financial advisors including Sullivan & Cromwell and Alvarez & Marsal, continues to navigate the challenges of equitable distribution amid evolving regulatory scrutinyFTX Recovery Trust to Distribute Approximately $1.6 Billion to Creditors in Third Distribution on September 30, 2025^[1].