FTX Creditors See 120% Payouts On Smaller Claims, 72.5% On Larger

FTX creditors are making significant strides in their repayments nearly three years after the company's collapse. Recent updates reveal that smaller claims are receiving payouts of 120%, while larger claims have so far been paid out at 72.5%. Additional distributions are scheduled through 2027, with the goal of achieving full recoveries for larger creditors.

Sunil Kavuri, an FTX creditor activist, disclosed that claims under $50,000 received 120% payouts in February and May 2025. This allows smaller creditors to recover more than their initial claims. For claims exceeding $50,000, creditors received a 72.5% payout in May. The remaining 27.5% is expected to be distributed in additional payments planned for October and December 2026, and into 2027. These distributions will bring the total recovery on larger claims to 100% of their face value. Kavuri also mentioned that post-petition interest returns are estimated to range between 40% and 80%.

The distribution process is being overseen by two custodians. These payments are being made under a Chapter 11 plan, which was approved by a bankruptcy judge last year. FTX, along with its affiliated companies, sought bankruptcy protection on November 11, 2022. Following the bankruptcy filing, Sam Bankman-Fried resigned as CEO, and corporate restructuring expert John J. Ray III was appointed to lead the company. Ray had previously handled the collapse of a major corporation.

Bankman-Fried received a 25-year sentence for defrauding customers and investors. Meanwhile, former Alameda Research CEO was sentenced to two years in federal prison. Beyond the criminal convictions of its top executives, the collapse of FTX also sparked lawsuits against celebrities and influencers who had endorsed the platform.

In May, a court dismissed the bulk of lawsuits brought against several celebrities and influencers who endorsed the crypto exchange before its collapse. However, NBA legend agreed to pay $1.8 million to settle a class-action lawsuit from investors of FTX, who alleged he misled them through his appearances in exchange advertisements. This payout is more than the $750,000 reportedly received for the commercial. claimed that he was only a paid actor and would avoid admitting wrongdoing. He would also be barred from seeking reimbursement from the exchange’s bankruptcy estate if the court approves the settlement.