FTX Recovery Trust to Distribute $5 Billion to Creditors Starting May 30

The FTX Recovery Trust is set to distribute over $5 billion to creditors starting May 30, marking a significant milestone in the recovery process of the bankrupt crypto exchange. This distribution is part of the Chapter 11 bankruptcy plan and follows an initial round of payments, highlighting the trust's commitment to fulfilling its obligations to creditors.

John J. Ray III, the plan administrator for the FTX Recovery Trust, emphasized the historic nature of this payout, noting that it reflects the complex nature of claims arising from a major crypto exchange collapse. The distribution process is designed to reimburse different classes of creditors based on the value of their holdings at the time of the exchange’s collapse in November 2022.

The upcoming distributions will affect four distinct groups of creditors, with payouts ranging between 54% and 102% of their original claims. This wide range is indicative of the intricate evaluation that has characterized the recovery plan. Class 5 creditors, which include lenders and trading partners, will receive between 54% and 72% of their claims. Those with smaller, unsecured claims are expected to see distributions around 61%, while inter-company claims might be reimbursed at a rate as high as 120%.

The trust has gathered a substantial amount of assets, estimated to be between $14.7 billion and $16.5 billion, which will be used to facilitate these payouts. This recovery effort is expected to benefit a vast majority of creditors, with projections indicating that 98% of eligible creditors will recover at least 118% of their claims. The payout process will involve the distribution of cash to creditors in both the Plan's Convenience and Non-Convenience Classes, who have completed the necessary verification and approval procedures.

The structured approach ensures that all eligible creditors receive their due payments in a timely and efficient manner. The trust's commitment to transparency and fairness in the distribution process is evident in its meticulous planning and execution. The upcoming distribution is not only a significant step towards the resolution of FTX's bankruptcy but also offers substantial recovery opportunities for creditors. The trust's efforts to maximize asset recovery and ensure fair distribution reflect its dedication to restoring trust and stability in the cryptocurrency exchange sector.

As the distribution date approaches, creditors can anticipate a structured and transparent process that prioritizes their interests and facilitates a smooth recovery. The recovery process represents a substantial step toward re-establishing trust within the crypto community, while ongoing regulatory changes continue to reshape the landscape. Creditors can look forward to a renewed sense of confidence as they witness the unfolding of this unprecedented recovery.