FTX's Debt Restructuring: Credit Risk and Recovery Potential in the January 2026 Repayment Round

The collapse of FTX in 2022 sent shockwaves through the crypto ecosystem, but its ongoing debt restructuring process has emerged as a critical case study in bankruptcy resolution. As the January 2026 repayment round approaches, creditors and investors are scrutinizing the FTX Recovery Trust's progress, recovery rates, and lingering risks. This analysis evaluates the credit risk and recovery potential for creditors in the upcoming distribution, drawing on the latest updates to FTX's liquidity strategy and asset valuation practices.

Progress of the Restructuring Plan

FTX's debt restructuring has already distributed $7.1 billion across three rounds by September 30, 2025, according to a Live Bitcoin News report. The first payout of $454 million in February 2025 prioritized smaller creditors, followed by a $5 billion disbursement in May and a $1.6 billion round in September, as reported by the same Live Bitcoin News report. These distributions reflect a phased approach to liquidating FTX's estimated $16–17 billion in net assets, as reported by the Live Bitcoin News report. The fourth round, expected in January 2026, will hinge on a December 2025 eligibility record date, as reported by a LookOnChain update.

A key factor in this progress is the use of external partners like BitGo, Kraken, and Payoneer to facilitate secure, global fund transfers, as reported by the Live Bitcoin News report. However, challenges persist, including disputes over asset valuation and cross-border regulatory hurdles.

Creditor Classifications and Recovery Rates

FTX's repayment strategy has prioritized smaller creditors, defined as those with claims of $50,000 or less (the "Convenience Class"). These creditors received full repayment-119% of their original claims plus 9% annual interest-according to the Live Bitcoin News report. This approach, while equitable, has left larger creditors with lower recovery rates. General unsecured and digital asset loan claims have received cumulative distributions of up to 85%, as reported by the Live Bitcoin News report.

The disparity in recovery rates underscores the inherent risks for larger creditors. For instance, a creditor with a $1 million claim would recover approximately $850,000 under current terms, compared to the 119%+ interest rate for smaller claims. This tiered structure reflects a balance between immediate liquidity for retail users and the need to preserve assets for future distributions.

Asset Valuation and Liquidity Strategy

A contentious issue in FTX's restructuring is the valuation of crypto assets. Repayments are based on the U.S. dollar value of assets at the time of FTX's collapse in November 2022, as reported by the Live Bitcoin News report. Critics argue that Bitcoin and other cryptocurrencies have appreciated significantly since then, potentially undervaluing the recovery for creditors who hold digital assets, as reported by the Live Bitcoin News report. For example, Bitcoin's price has surged from ~$35,000 in 2022 to over $70,000 in 2025, as reported by a Phemex report, raising questions about whether creditors should benefit from this appreciation.

The FTX Recovery Trust has defended its methodology, emphasizing consistency and transparency. However, this approach could face legal challenges if creditors argue that market conditions have fundamentally changed since 2022.

Legal and Regulatory Risks

The FTX Recovery Trust recently withdrew a controversial motion to restrict payouts in jurisdictions like China and Russia, as reported by a Finance Feeds report. This decision, made after strong creditor pushback, ensures broader access to distributions for creditors in 49 countries, as reported by a Coinotag report. Yet, the withdrawal is "without prejudice," meaning the Trust could refile the motion if regulatory challenges intensify, as reported by the Coinotag report.

Creditors in jurisdictions with unclear crypto laws-such as Turkey or India-face heightened uncertainty. Additionally, the Trust's ability to navigate U.S. regulatory scrutiny, including the Department of Justice's seizure of assets, remains a wildcard, as reported by the Live Bitcoin News report.

Credit Risk Assessment for January 2026

For the January 2026 round, creditors must weigh several risks:
1. Asset Valuation Disputes: If courts rule that FTX's assets should be valued at current market prices, recovery rates could rise. Conversely, a ruling upholding 2022 valuations would lock in lower returns.
2. Regulatory Interventions: New restrictions on cross-border payments could delay or reduce distributions for international creditors.
3. Market Volatility: A downturn in crypto prices could erode the value of remaining assets before the final rounds of repayment.

Despite these risks, the $16–17 billion asset pool provides a robust foundation for creditors. The Convenience Class's full repayment and interest payments demonstrate the Trust's commitment to liquidity, while the phased approach minimizes the risk of asset depletion.

Conclusion and Investment Implications

FTX's debt restructuring has delivered significant value to creditors, but the January 2026 round will test the Trust's ability to navigate legal and market complexities. Smaller creditors are in a strong position, having already received full repayment plus interest. Larger creditors, however, face a more uncertain outlook, contingent on asset valuations and regulatory developments.

Investors and creditors should monitor the Trust's December 2025 eligibility announcement and any legal challenges to asset valuation. For now, the $16–17 billion asset pool and the Trust's operational efficiency suggest a high probability of successful distributions, albeit with uneven recovery rates across creditor classes.