FTX to Begin $1.9B Payout in September, Third Distribution as Claims Reserves Cut to $4.3B

The FTX bankruptcy estate is set to initiate a $1.9 billion distribution to creditors on Sept. 30, marking the third round of repayments since February. The funds stem from a reduction in disputed claims reserves, which were cut from $6.5 billion to $4.3 billion following a court-approved adjustment. Eligible claim holders will be determined based on a record date of Aug. 15 [1]. This distribution follows prior payouts of $1.2 billion in February and $5 billion in May, signaling progress in the liquidation process. The FTX Recovery Trust and FTX Trading confirmed the schedule, though details on which claims qualify remain unspecified [1].

The $1.9 billion release excludes creditors in China and other jurisdictions flagged in a motion restricting payments due to potential legal conflicts with local crypto regulations. Sunil Kavuri, an FTX creditor, noted that claims from these regions “have not been allowed yet and are unlikely to be allowed by the record date” [2]. The disputed $4.3 billion reserve likely includes unresolved claims from these areas, though the court has yet to finalize rulings on jurisdictional restrictions [2]. Kavuri also highlighted that the new payout may cover partial payments for claims exceeding $50,000, which had previously received limited distributions [2].

The court’s recent approval of a delay in ruling on the restricted jurisdictions motion has further complicated the process. A July 22 hearing initially aimed to resolve the estate’s bid to freeze payments to 49 jurisdictions but was postponed after creditors raised over 90 objections. While a U.S. bankruptcy judge authorized the delay, the underlying motion remains pending, with the court demanding a “much more detailed and workable framework” for reclassifying restricted jurisdictions [3]. Creditor Weiwei Ji, who attended the July 22 hearing, emphasized that the motion’s current form is “not feasible” and must address how creditors can appeal jurisdictional classifications [3].

The FTX estate has yet to respond to inquiries about the distribution’s implementation, leaving uncertainties about the timeline and scope. The ongoing litigation underscores the complexity of navigating global regulatory disparities in crypto bankruptcies. With $4.3 billion still in dispute, the estate’s ability to finalize claims and manage jurisdictional challenges will be critical to future distributions [1][2][3].

Sources:

[1] [FTX to begin $1.9B payouts in September as claims no longer disputed](https://coinmarketcap.com/community/articles/6882216602db7b7c87a4414f/)

[2] [FTX to begin $1.9B payouts in September as claims no longer disputed](https://coinmarketcap.com/community/articles/6882216602db7b7c87a4414f/)

[3] [FTX to begin $1.9B payouts in September as claims no longer disputed](https://coinmarketcap.com/community/articles/6882216602db7b7c87a4414f/)