FTX Third Creditor Payment Reduced Reserve Triggers $1.9B Distribution

The bankrupt cryptocurrency exchange FTX has announced the third round of creditor payments following a court-approved reduction in its liquidation reserve. The distribution, scheduled for September 30, will release an additional $1.9 billion to eligible claimants after the reserve was lowered from $6.5 billion to $4.3 billion. The August 15 deadline for claim registration means only creditors who submitted their claims by this date will qualify for payouts, which will be processed through BitGo, Kraken, and Payoneer. Recipients must complete KYC checks and provide tax documentation, aligning with regulatory requirements for cross-border transactions [1].

The third distribution builds on prior payments totaling $6.2 billion, which included $1.2 billion in February and $5 billion in May. FTX’s restructuring plan aims to return up to $16.5 billion to creditors over time, with 98% of claimants receiving at least 119% of their November 2022 bankruptcy claims. However, critics argue this compensation calculation overlooks the surge in crypto prices over the past two years, which could undervalue recent claims [1].

The court’s rejection of FTX’s July proposal to block claims from 49 jurisdictions—including China, Russia, and Saudi Arabia—has added complexity to the process. The initial plan, which sought to exclude creditors in these regions, was struck down on July 22, forcing FTX to reconsider how to handle claims from disputed areas. Some cases may now be reassessed under different jurisdictional frameworks, such as moving them to China Hong Kong [1].

FTX’s administrators have emphasized the structured nature of the payout plan, which is part of a broader liquidation strategy led by Quinn Emanuel Urquhart & Sullivan. The reduction in the reserve reflects confidence in the stability of remaining assets, though exact distribution percentages for the third phase remain undisclosed. This phase focuses on general unsecured creditors, who have historically received smaller shares compared to secured claimants in earlier rounds [3].

The delay in the third payment—from an initial 2024 target to September 2025—has been attributed to legal challenges, including lawsuits over alleged mismanagement and disputes over asset allocation. Unlike secured creditors, holders of FTT tokens remain excluded from this round, as their claims are being resolved separately due to their speculative nature and valuation complexities [3].

The ongoing restructuring has drawn scrutiny from regulators and creditors, highlighting systemic risks in centralized crypto exchanges. The U.S. House of Representatives has also shown interest in the case, with live-streamed legislative activities underscoring the political implications of FTX’s collapse [2]. Meanwhile, the prolonged resolution process has fueled demand for stricter regulatory frameworks, as trust in centralized platforms continues to erode.

Funds for the third distribution will be sourced from cash reserves, asset sales, and settlements, with administrators coordinating with global regulators to ensure compliance with anti-money laundering rules. The timing of the payout coincides with broader market volatility, including regulatory actions by Australia’s ASIC and earnings reports from major corporations, which could influence creditor reception of the distribution [4].

FTX’s administrators have reaffirmed their commitment to a transparent liquidation process, emphasizing that the third wave does not involve new debt or equity offerings. This approach contrasts with alternative strategies in the crypto sector, such as fiat purchase options introduced by Pi Network and Bitcoin payment integrations by Square, which seek to adapt to market challenges through innovation rather than liquidation [3].

Source:

[1] [FTX to Roll Out Third Wave of Creditor Payments After Reserve Reduction](https://coinmarketcap.com/community/articles/68823c5a82fa5c0266a0b8fd/)

[2] [U.S. House of Representatives Legislative Activity](https://live.house.gov/)

[3] [FTX Announces September 30 Date for Next $1.9 Billion Creditor Distribution](https://coincentral.com/pi-network-adds-fiat-purchase-option-with-new-wallet-buy-feature/)

[4] [ASIC Newsroom on Financial Services Licensing](https://www.asic.gov.au/newsroom/search/)