FTX to Distribute $5 Billion to Creditors in May 2025

FTX Trading Ltd. and the FTX Recovery Trust have confirmed that a substantial $5 billion will be distributed to eligible creditors as part of the second major payout under the Chapter 11 bankruptcy process. This repayment is scheduled to commence on May 30, 2025, providing long-awaited relief for creditors affected by one of the biggest financial scandals in the crypto industry. The distribution date is May 30, 2025, with the total amount exceeding $5 billion. Eligible creditors are those who have completed all pre-distribution requirements, including onboarding with approved distribution platforms such as BitGo or Kraken. Funds are expected to reach creditors within 1 to 3 business days following the distribution date.

This round of payments follows the initial distribution in February 2025, which prioritized smaller claims under $50,000. The upcoming May payments will address larger claims, with some creditors set to receive between 54% and 120% of their allowed claim amounts. The repayment plan outlines specific payout percentages for different classes of creditors. Class 5A Dotcom Customer Entitlement Claims will receive a 72% payout, while US-based Class 5B Customer Entitlement Claims will receive 54%. Class 6A General Unsecured Claims and Class 6B Digital Asset Loan Claims will receive 61%, and Class 7 Convenience Claims, which typically cover smaller claims, will be paid out at 120%. This second round of repayments is over four times larger than the first round, which totaled $1.2 billion.

John J. Ray III, the Plan Administrator for the FTX Recovery Trust, highlighted the complexity of the creditor payment operation, noting that the breadth of the creditor base makes this one of the most intricate repayment processes to date. He credited the professional recovery teams for their efforts in navigating the large-scale coordination required for these distributions. The May 30 payouts follow an earlier round of distributions that began in February, which saw smaller creditors with approved amounts under $50,000 receive full reimbursements and 9% annual interest accrued since the bankruptcy filing in November 2022.

Customers who have onboarded with either BitGo or Kraken as their selected provider will receive their payments directly from these platforms. By doing so, these customers have waived their right to receive direct cash distributions from FTX and have instructed the firm to remit funds to their chosen provider. The Trust will disclose future payment dates as the process continues. The total amount allocated for repayments is $16 billion, with some creditors expressing frustration over the wait. However, bankruptcy filings indicate that the estate has recovered more than initially projected, enabling broader and deeper repayment efforts than originally anticipated. This distribution plan represents a crucial step in the ongoing recovery process for FTX, providing a pathway for creditors to receive a portion of their claims and move forward from the financial turmoil caused by the exchange's collapse.

All repayments are calculated based on the value of assets at the time of FTX’s bankruptcy filing in November 2022. This means creditors will not benefit from any appreciation in crypto values since that date. While this approach has sparked debates, it remains in line with U.S. bankruptcy law and similar proceedings. FTX’s latest move is a significant step toward resolving the platform’s financial obligations and restoring its tarnished reputation. Following the collapse, which sent shockwaves across the crypto market, FTX has worked diligently to recover assets and provide creditors with as much value as possible. This repayment plan represents both a financial and symbolic turning point for the crypto industry as it continues to navigate the aftermath of one of its most devastating failures.