FTX Disburses 1.9B to Creditors on Sept 30 as Reserve Cuts Free Funds

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. The $1.9 billion disbursement follows a reduction in the disputed claims reserve from $6.5 billion to $4.3 billion, releasing funds for holders of approved claims [1]. This marks the third major payout since the crypto exchange’s collapse in 2022, with prior distributions totaling $6.2 billion in February and May 2025 [3]. The latest allocation will target fifth- and sixth-category unsecured creditors, alongside newly approved claims, requiring participants to complete KYC verification, submit tax forms, and select a payment method (BitGo, Kraken, or Payoneer) by Aug. 15 [2].

The repayment plan aims to distribute between $14.7 billion and $16.5 billion in total, with 98% of creditors expected to recover at least 119% of their claims based on the firm’s insolvency value [3]. However, critics argue that the crypto market’s appreciation since 2022 has rendered the plan less equitable for some stakeholders. The September 30 payout is the largest single tranche to date, offering relief to both retail and institutional investors.

The FTX Recovery Trust has also sought to reverse claims from creditors in “restricted jurisdictions,” including China, Russia, Saudi Arabia, and Pakistan, where local laws may prohibit cryptocurrency transactions or distributions [3]. The proposal, which could forfeit up to 82% of the value held in China, has faced backlash from affected investors. The trust’s motion, filed in July, requests court approval to block payments in these regions, citing legal risks [1].

The structured approach to disbursement emphasizes procedural rigor, with a 21-day objection period to resolve disputes and claims transfers finalized by the Aug. 15 deadline [2]. BitGo and Kraken, selected for their crypto expertise, will handle digital transactions, while Payoneer’s inclusion aims to support creditors lacking direct blockchain access [2]. The trust reiterated that funds will only become accessible once transferred to the chosen service provider’s account, underscoring the importance of deadline compliance.

Analysts note that the prolonged timeline—nearly three years since FTX’s collapse—highlights systemic challenges in crypto governance and regulatory alignment [2]. The court-approved reserve reduction accelerates liquidity for approved stakeholders but leaves unresolved disputes valued at $4.3 billion, potentially delaying future payouts. For the broader market, the trust’s model combines court oversight with decentralized stakeholder participation, offering a potential framework for crypto insolvency proceedings. However, the sector’s fragmented regulatory landscape and lack of standardized recovery mechanisms remain persistent hurdles [3].

Creditors are urged to complete participation steps promptly, as procedural compliance will determine the success of this round. The September 30 disbursement represents a critical milestone in FTX’s repayment efforts, but its long-term efficacy will depend on navigating legal complexities and maintaining stakeholder trust.

Sources:

[1] CoinDesk, [https://www.coindesk.com/policy/2025/07/24/ftx-to-start-next-round-of-creditor-repayments-on-sept-30]

[2] AInvest, [https://www.ainvest.com/news/ftx-distribute-1-9-billion-creditors-september-2025-court-approval-2507/]

[3] FXLeaders, [https://www.fxleaders.com/news/2025/07/24/ftx-to-begin-1-9b-distribution-to-creditors-by-september-30-2025/]