FTX Cuts Disputed Claims Reserve by $1.9B to Accelerate Creditors' Payouts

FTX Trading Ltd. has secured court approval to reduce its disputed claims reserve by $1.9 billion, accelerating distributions to verified creditors and customers impacted by the exchange’s collapse. The U.S. Bankruptcy Court in Delaware approved the move, lowering the reserve from $6.5 billion to $4.3 billion after resolving or disqualifying multiple claims. This adjustment allows FTX to allocate additional funds for payouts, with the next disbursement slated for September 30, 2025, contingent on claimants meeting Know Your Customer (KYC) requirements and submitting tax documentation by August 15, 2025 [1]. The distributions will be managed through BitGo, Kraken, and Payoneer, with FTX emphasizing that only verified claimants listed by the record date will qualify for payments [2].

The reserve reduction reflects progress in FTX’s restructuring efforts, though $4.3 billion remains reserved for unresolved claims. Chinese creditors have raised objections to regional payout restrictions, citing $800 million in claims across 49 jurisdictions, highlighting ongoing complexities in liquidating the exchange’s liabilities [3]. FTX also announced the reallocation of reserved assets, including the unstaking of $31 million in Solana tokens, though their use has not been specified. The court’s decision streamlines compensation for stakeholders holding Bitcoin, Ethereum, and altcoins, prioritizing validated claims over prolonged disputes that previously delayed disbursements.

Verified claimants must complete identity verification and ensure transferred claims are updated in the official register by August 15 to avoid exclusion. FTX reiterated that it will not manage individual account access or payment updates, directing users to contact BitGo, Kraken, or Payoneer directly for assistance. The exchange also issued warnings against phishing scams, urging users to avoid sharing private wallet keys or clicking on unknown links [4]. Once funds reach provider accounts, customers will bear sole responsibility for managing their assets, with FTX emphasizing that it will not intervene in post-disbursement activities.

Industry observers note that the structured timeline—less than 10 months from the record date to potential payouts—differs from past crypto insolvencies, such as Mt. Gox, where ad hoc distributions exacerbated market instability. FTX’s approach, however, introduces a framework for orderly resolution, balancing liquidity needs with regulatory expectations. Analysts highlight that successful execution of this phase could stabilize market confidence and set a precedent for managing high-profile crypto bankruptcies [5].

The approval underscores FTX’s shift toward transparency in restructuring, a critical step for regaining stakeholder trust. While the remaining $4.3 billion in unresolved claims reflects the complexity of liquidating its liabilities, the court’s oversight ensures equitable treatment. FTX also announced a new platform by crypto exchange Backpack, allowing creditors to sell debt claims for liquidity, adding flexibility for those seeking early exits from the process [6].

The court’s intervention addresses operational feasibility while aligning with stakeholder interests, enabling FTX to maintain liquidity without compromising its restructuring strategy. However, challenges persist in resolving disputes efficiently and managing expectations across jurisdictions. The outcome will hinge on the timely execution of disbursements and resolving remaining claims without court intervention, a critical test for FTX’s credibility in the crypto market.

Sources:

[1] CoinGape, [url1=https://coingape.com/court-approves-1-9b-reserve-release-enabling-next-ftx-distribution/]

[2] PR Newswire, [url2=https://www.prnewswire.com/news-releases/ftx-sets-next-distribution-date-following-disputed-claims-reserve-reduction-302512444.html]

[3] NewsNow, [url3=https://www.newsnow.co.uk/h/Business+&+Finance/Cryptocurrencies]

[4] Cryptonewsland, [url=https://cryptonewsland.com/ftx-cuts-claims-reserve-by-1-9-billion-after-court-approval-to-accelerate-customer-and-creditor-payouts/]

[5] CoinGape, [url1=https://coingape.com/court-approves-1-9b-reserve-release-enabling-next-ftx-distribution/]

[6] Cryptonewsland, [url=https://cryptonewsland.com/ftx-cuts-claims-reserve-by-1-9-billion-after-court-approval-to-accelerate-customer-and-creditor-payouts/]