FTX Cuts Disputed Claims Reserve by $1.9B, Third Creditor Payout on September 30, 2025

Defunct crypto exchange FTX has secured court approval to initiate its third round of creditor payouts on September 30, 2025, following a $1.9 billion reduction in disputed claims reserves [1]. The U.S. bankruptcy court’s decision lowers the contested reserve from $6.5 billion to $4.3 billion, freeing funds for approved claims, including Class 5 Customer Entitlement, Class 6 General Unsecured, and newly allowed Convenience Claims [2]. Eligible claimants must complete Know Your Customer (KYC) verification and submit tax documents by August 15, 2025, to qualify for disbursements [3]. Payments will be processed through institutional custodians BitGo, Kraken, and Payoneer, ensuring compliance with regulatory standards [4].

This payout follows two prior distributions totaling $6.2 billion, with February’s $1.2 billion and May’s $5 billion rounds marking significant progress in repaying $14.7–$16.5 billion in total obligations [5]. The court’s emphasis on cash over digital assets aims to mitigate crypto market volatility while aligning with traditional bankruptcy practices [6]. However, challenges persist in 49 jurisdictions deemed “restricted,” including China, where 82% of the $800 million in disputed claims are concentrated [7]. The FTX Recovery Trust has proposed a plan to exclude these regions from the current payout, citing compliance risks, but faces legal pushback from creditors.

Chinese users, led by claimant Weiwei Ji, who holds $15 million in verified claims, have contested the exclusion as discriminatory and legally unfounded. Ji argues that crypto remains recognized as legal property in China and highlights alternative legal pathways through Hong Kong to challenge the restriction [8]. The court will evaluate the dispute during an omnibus hearing in July 2025, which could redefine jurisdictional classifications and impact the distribution timeline for affected claimants [9]. Critics warn that excluding users based on regulatory assumptions may disproportionately affect smaller creditors unfamiliar with compliance protocols, raising concerns about equitable distribution [10].

The restructuring process underscores the complexities of crypto insolvencies within regulatory gray areas. While the phased payout model offers a precedent for similar cases, it also reveals tensions between compliance demands and accessibility. Approximately 98% of creditors are expected to receive at least 119% of their claims based on bankruptcy valuations, though unresolved disputes and fragmented claim structures may prolong full resolution for years [11]. The court’s focus on cash disbursements reflects an effort to stabilize repayments amid ongoing legal challenges, yet broader implications for crypto bankruptcy frameworks remain uncertain [12].

As the September 30 payout date approaches, creditors are urged to finalize documentation and monitor updates from the recovery trust. The case continues to test how traditional bankruptcy frameworks adapt to crypto-specific complexities, balancing regulatory compliance with fair compensation for affected users.

Sources:

[1] [FTX to begin $1.9B payouts in September as claims no longer disputed](https://cointelegraph.com/news/ftx-distribute-1-9-billion-court-approval-cut-disputed-claims)

[2] [FTX to distribute $1.9B to eligible creditors by September 30. Claims deadline set for August 15. BitGo, Kraken, and Payoneer to handle payments.](https://www.fxleaders.com/news/2025/07/24/ftx-to-begin-1-9b-distribution-to-creditors-by-september-30-2025/)

[3] [FTX Recovery Trust announces $1.9B creditor payout starting Sept 30, 2025, after reducing disputed claims reserve by $2.2B.](https://www.ainvest.com/news/ftx-recovery-trust-reduces-disputed-claims-reserve-2-2b-release-1-9b-creditors-payouts-sept-30-2507/)

[4] [FTX will distribute its next round of creditor payments on Sept. 30, 2025, as part of its ongoing repayment plan approved by U.S. bankruptcy courts.](https://www.ainvest.com/news/ftx-disburses-1-9b-creditors-sept-30-reserve-cuts-free-funds-2507/)

[5] [FTX has announced that it will begin its next round of cash distributions to creditors on or around September 30, 2025.](https://cryptonews.com/news/ftx-to-begin-next-round-of-cash-payouts/)

[6] [FTX will start its next creditor payout on Sept. 30, 2025, after a court approved the release of $1.9B. Record date for claims is Aug. 15.](https://crypto.news/ftx-creditor-payment-sept-court-frees-1-9b-2025/)

[7] [FTX Sets Next Distribution Date Following Disputed Claims Reserve Reduction](https://www.prnewswire.com/news-releases/ftx-sets-next-distribution-date-following-disputed-claims-reserve-reduction-302512444.html)

[8] [FTX to Distribute $1.9B to Creditors by September 2025](https://www.ainvest.com/news/ftx-distribute-1-9b-creditors-september-2025-reserve-cut-2507/)

[9] [FTX is set to begin creditor payouts on September 30, 2025](https://www.mitrade.com/insights/news/live-news/article-3-981961-20250724)

[10] [FTX Announces September 30 Date for Next $1.9 Billion Creditor Distribution](https://coincentral.com/ftx-announces-september-30-date-for-next-1-9-billion-creditor-distribution/)

[11] [FTX to Start Next Creditor Payout in September Following Court Approval](https://coinmarketcap.com/community/articles/68827ccf747ff0612d594ae1/)

[12] [FTX Trading Ltd. and the FTX Recovery Trust have secured court approval to release $1.9 billion in previously disputed claims reserves...](https://coinmarketcap.com/community/articles/68827ccf747ff0612d594ae1/)