FTX Distributes $1.9B to Creditors from Reduced Claims Reserve by Sept 30

FTX Trading Ltd. has outlined plans to distribute $1.9 billion to verified creditors on September 30, 2025, marking the third major disbursement under its bankruptcy proceedings. The payout, sourced from a reduced claims reserve approved by a Delaware bankruptcy court, excludes disputed claims and jurisdictions currently under legal review. The move reflects efforts to streamline asset recovery while navigating complex international legal frameworks. To qualify, creditors must complete Know-Your-Customer (KYC) procedures by August 15, with the estate aiming to identify eligible claim holders whose claims have been formally allowed [2].

The distribution stems from a $1.9 billion reduction in the disputed claims reserve, previously $6.5 billion, now adjusted to $4.3 billion. This adjustment accelerates liquidity for creditors, many of whom have already received partial repayments. To date, approximately $6.2 billion has been distributed, including $1.2 billion in February and $5 billion in May [2]. Around 98% of creditors are projected to recover at least 119% of their claims based on the value at the time of FTX’s 2022 collapse, though critics argue the calculation does not account for broader crypto market gains post-bankruptcy [2].

A contentious aspect of the plan involves the exclusion of certain restricted jurisdictions. On July 4, the FTX Recovery Trust proposed measures to assess claims in regions where distributions could be deemed illegal [2]. Initially, the motion included a clause allowing for the immediate forfeiture of claims in unspecified jurisdictions. However, after objections from affected creditors, the court ordered revisions. The updated plan now permits creditors in restricted areas to transfer their claims via an alternative jurisdiction, removing the automatic forfeiture provision [2]. Sunil Kavuri, a prominent FTX creditor, emphasized that unresolved legal motions in these regions are likely to exclude their claims from the September 30 distribution [1].

The court’s intervention highlights the complexities of cross-border crypto insolvencies. The July 22 hearing, originally intended to resolve the motion, resulted in a directive for FTX to revise its approach. The court emphasized the need for a detailed framework allowing creditors to appeal or reclassify their jurisdictions, underscoring procedural fairness [1]. Weiwei Ji, another creditor, noted the court explicitly prohibited the seizure of funds without a clear procedural mechanism, balancing asset recovery with creditor rights [1].

The distribution is expected to be processed through BitGo, Kraken, and Payoneer, with market participants speculating that the liquidity influx could bolster trading activity, particularly for altcoins [2]. Analysts, however, remain cautious, noting that unresolved legal complexities—such as cross-jurisdictional claims—may prolong full resolution of the bankruptcy estate. The court’s prioritization of disbursements reflects broader efforts to finalize the process, which has seen over $11 billion in total distributions since 2023 [2].

The exclusion debate underscores the challenges of navigating global regulatory disparities in crypto bankruptcy cases. As the September 30 deadline approaches, stakeholders will closely monitor how revised jurisdictional policies affect claim eligibility and recovery rates. The case continues to serve as a critical precedent for handling cross-border insolvencies in the crypto sector, with the court’s demand for transparency ensuring creditor protections remain paramount [1].

Sources:

[1] [FTX to begin $1.9B payouts in September as claims no longer disputed](https://www.tradingview.com/news/cointelegraph:4e26af97c094b:0-ftx-to-begin-1-9b-payouts-in-september-as-claims-no-longer-disputed/)

[2] [FTX next creditor payout Sep 30](https://www.theblock.co/post/364059/ftx-next-creditor-payout-sep-30)

[4] [FTX Sets August 15 Record Date for Next $1.9B Creditor Distribution](https://coincentral.com/ftx-sets-august-15-record-date-for-next-1-9b-creditor-distribution/)

[5] [FTX Cuts Disputed Claims Reserve by $1.9B to Accelerate Creditors’ Payouts](https://www.ainvest.com/news/ftx-cuts-disputed-claims-reserve-1-9b-accelerate-creditors-payouts-2507/)