FTX to Distribute $1.9B to Creditors via Court-Approved Reserve Reallocation

FTX Trading Ltd. has announced a $1.9 billion disbursement to creditors on September 30, 2025, following a U.S. bankruptcy court’s approval to reallocate funds previously held in disputed claims reserves [1]. The payout marks the third major distribution in the platform’s recovery process, with prior delays attributed to legal and operational complexities [2]. The FTX Recovery Trust, along with service providers BitGo, Kraken, and Payoneer, will facilitate the transaction. However, creditors must complete KYC verification by August 15, 2025, to qualify [4].

The court’s decision reflects a shift in the Recovery Trust’s strategy, prioritizing expedited settlements over prolonged litigation [7]. By reducing disputed claims reserves by the same $1.9 billion amount, the trust aims to accelerate repayment for verified claimants, though unresolved claims may delay further distributions [3]. The payout, however, does not fully resolve FTX’s obligations, as future disbursements depend on ongoing legal approvals and liquidity availability [6].

Criticisms have emerged regarding the fixed valuation of cryptocurrencies at November 2022 prices, a date that precedes FTX’s collapse. This approach has sparked discontent among creditors, who argue it devalues their recoverable assets [5]. The situation mirrors historical precedents like Mt. Gox, where creditors faced similar pricing discrepancies and protracted delays [5]. Sunil Kavuri, a creditor representative, noted that disputed claims remain unresolved, with jurisdictional restrictions under review [8].

The court’s oversight highlights the evolving regulatory framework for crypto bankruptcies, setting a precedent for resolving disputes in an industry marked by volatility and opaque governance [9]. For creditors, the September 2025 payout represents a partial resolution, but uncertainties persist about the timeline for full repayment. The August 15 KYC deadline serves as a critical compliance checkpoint, with non-compliance risking delayed access to funds [8].

The broader market implications remain mixed. While the payout may stabilize the FTX ecosystem, it also underscores systemic risks in crypto exchanges, including governance failures and liquidity challenges [5]. Investors and regulators are likely to monitor the distribution’s success, as it could influence future approaches to crypto asset recovery and regulatory oversight [9].

Source:

[1] [FTX to Start Next Creditor Payout in September Following Court Approval](https://cryptopotato.com/ftx-to-start-next-creditor-payout-in-september-following-court-approval/)

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

[3] [FTX and Recovery Trust Distribute $1.9B to Creditors by Sept 30](https://www.ainvest.com/news/ftx-distribute-1-9b-creditors-september-2025-court-reduces-disputed-claims-reserve-1-9b-2507)

[4] [KYC and Onboarding Deadline Aug 15](https://www.livebitcoinnews.com/ftx-launches-next-cash-payout-round-after-1-9b-claims-reserve-cut/)

[5] [FTX Sets $1.9B Third Payout After Reserve Cut](https://coinpaper.com/10142/ftx-to-roll-out-third-wave-of-creditor-payments-after-reserve-reduction)

[6] [FTX to Begin Next Round of Creditor Repayments in September](https://defi-planet.com/2025/07/ftx-to-begin-next-round-of-creditor-repayments-in-september/)

[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 Begin $1.9B Creditor Payout on Sept. 30](https://crypto.news/ftx-creditor-payment-sept-court-frees-1-9b-2025/)

[9] [FTX is Set to Begin Creditor Payouts on September 30, 2025](https://www.mitrade.com/insights/news/live-news/article-3-981961-20250724)