FTX's $1.6B Payout Faces Price Dispute Over Asset Valuations

FTX’s Recovery Trust announced the distribution of $1.6 billion to creditors on September 30, 2025, marking the third major payout in the bankruptcy estate’s efforts to return funds to victims of the collapsed crypto exchange. The allocation follows a structured waterfall distribution model, with U.S. customer claims (Class 5B) receiving 40% of their entitled amount in this round, raising their cumulative recovery to 95%. International customers (Class 5A) received an incremental 6%, bringing their total to 78%, while general unsecured and digital asset loan claims (Classes 6A and 6B) each received 24%, pushing cumulative payouts to 85%. Convenience claims (Class 7) were overpaid at 120%, exceeding the face value of owed amounts.

The distribution, processed through BitGo, Kraken, or Payoneer, requires creditors to have completed verification steps via the FTX claims portal. Funds were expected to reach eligible accounts within three business days of the payment date. Total recoveries to date now exceed $7.8 billion, combining this round with prior distributions of $5 billion in May and $1.2 billion in February. The repayment process adheres to U.S. bankruptcy court-approved procedures, with remaining distributions contingent on further asset liquidation and claim finalization.

The payout underscores the scale of FTX’s collapse in November 2022, which triggered a broader market downturn and led to the conviction of former CEO Sam Bankman-Fried on seven counts of fraud and conspiracy. Bankman-Fried, sentenced to 25 years in prison in March 2024, faces an appeal in November, while legal battles persist over the legitimacy of asset liquidations and claims valuation rules. Critics argue that the use of November 2022 prices—when crypto values were significantly lower—understates the true value of recovered assets.

Creditors’ recovery rates vary by claim type, reflecting the complexity of the bankruptcy estate’s asset management. U.S. customers, who were prioritized in the distribution, now have reclaimed nearly all of their balances, while smaller claimants in Class 7 have been overcompensated. The remaining $8.7 billion in recoverable assets will be distributed in subsequent rounds, pending court approvals and claim validation.

The FTX case remains a landmark in crypto history, illustrating both the challenges of regulating digital assets and the potential for large-scale creditor recovery in bankruptcy proceedings. While some argue that the legal framework has enabled a relatively high recovery rate compared to traditional bankruptcies, others highlight the inefficiencies, such as the taxpayer burden of Bankman-Fried’s lengthy prison sentence.