FTX Distributes $1.9B to Creditors After Court-Approved Disputed Claims Reserve Cut

The FTX bankruptcy estate has announced a $1.9 billion distribution to creditors beginning Sept. 30, 2025, following a court-approved reduction in disputed claims reserves. The payout, marking the third round of repayments, follows earlier distributions totaling $6.2 billion in February and May. The reduction in disputed claims reserves from $6.5 billion to $4.3 billion freed up the $1.9 billion for eligible claimants who submitted paperwork by the Aug. 15 record date [1][2]. The distribution will prioritize fifth- and sixth-tier creditors, including unsecured and smaller investors, as part of a broader strategy to streamline liquidity for lower-priority stakeholders [3].

The decision to disburse funds from non-disputed claims reflects progress in resolving legal complexities that have delayed FTX’s liquidation since its collapse in late 2022. However, the exclusion of jurisdictions flagged in a pending motion—such as China and others—remains a contentious issue. Sunil Kavuri, a FTX creditor, noted that claims from these regions are “unlikely to be allowed by the record date” and may not qualify for this round [4]. The estate’s motion to freeze payments to 49 jurisdictions over regulatory concerns has faced widespread criticism, prompting the court to grant additional time for revisions to address objections. A formal ruling on the motion remains pending, with creditors emphasizing the need for a “clear method” to reclassify jurisdictions from restricted to non-restricted [5].

Operational execution of the payout will rely on third-party platforms including BitGo, Kraken, and Payoneer, which have been designated to process transfers. This approach aims to mitigate logistical challenges that plagued earlier distributions, though concerns about technical delays persist. The use of established financial services providers signals a shift toward standardizing payout infrastructure amid scrutiny over accountability and transparency [6].

From an analytical standpoint, the $1.9 billion release underscores the phased nature of FTX’s repayment plan, with higher-priority claims already addressed and complex legal disputes deferred to subsequent rounds. While the reduction in disputed reserves indicates improved efficiency in asset management, the exclusion of certain jurisdictions highlights unresolved tensions between regulatory compliance and stakeholder equity. The ongoing negotiations over restricted jurisdictions also reveal the broader challenge of harmonizing global crypto regulations with bankruptcy proceedings.

The structured timeline for payouts—aligned with court mandates for transparency—positions FTX’s liquidation as a potential blueprint for future crypto bankruptcies. By prioritizing liquidity for lower-tier creditors and addressing legal bottlenecks incrementally, the estate aims to balance stakeholder trust with operational feasibility. However, the exclusion of specific institutional and regional claims underscores the limitations of a one-size-fits-all approach in cross-border financial recoveries.

Source:

[1] [FTX To Pay Creditors $1.9B After Claim Dispute Cut](https://cointelegraph.com/news/ftx-distribute-1-9-billion-court-approval-cut-disputed-claims)

[2] [FTX Recovery Trust Reduces 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/)

[3] [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)

[4] [FTX to begin $1.9B creditor payout on Sept. 30](https://crypto.news/ftx-creditor-payment-sept-court-frees-1-9b-2025/)

[5] [FTX Disburses 1.9B to Creditors on Sept 30 as Reserve Cuts Free Funds](https://www.ainvest.com/news/ftx-disburses-1-9b-creditors-sept-30-reserve-cuts-free-funds-2507/)

[6] [FTX Announces September Cash Payouts](https://www.cryptowisser.com/news/ftx-announces-september-cash-payouts-claims-adjustment/)