FTX Recovery Trust Distributes $5 Billion to Creditors in Second Wave of Payments

The FTX Recovery Trust has initiated a significant second wave of payments to creditors, marking a crucial step in the reimbursement process following the collapse of the exchange. On May 30, the Trust began distributing $5 billion to eligible creditors who had completed the necessary pre-distribution requirements. This distribution targets both the Convenience and Non-Convenience Classes, as outlined in a May 28 announcement detailing the allocation of funds across various claim types.

Under the plan, Dotcom Customer Entitlement Claims are set to receive a 72% distribution, while US Customer Entitlement Claims will see a 54% payout. Convenience Claims will receive a full 120% reimbursement. General Unsecured Claims and Digital Asset Loan Claims are scheduled for a 61% distribution. Payments are being processed through official distribution partners Kraken and BitGo, with recipients expected to receive funds within one to two business days.

The FTX reimbursements are being closely monitored by crypto investors, as large liquidity injections from these payouts could impact digital asset markets. Analysts warn that if recipients choose to offload or swap their recovered funds on retail exchanges, it could introduce short-term price volatility. This is the second major disbursement since FTX’s collapse. The first round of payments, totaling $1.2 billion, was distributed on February 18 to claimants with less than $50,000 in approved claims.

The reimbursement process has not been without controversy. In September 2024, FTX creditor Sunil Kavuri highlighted that claim values were being calculated based on prices at the time of the bankruptcy filing — during the depths of the crypto winter — rather than current market values. As a result, many creditors are recovering just 10% to 25% of their crypto holdings’ actual value. Kavuri has also raised concerns about global fairness, noting that creditors in 163 countries remain ineligible for payouts.

FTX founder Sam Bankman-Fried is now projected to be released from federal prison on December 14, 2044, after serving less than 21 years of his 25-year sentence for fraud tied to the FTX collapse. He was also fined over $11 billion. Federal records confirm that Bankman-Fried has been moved from New York to a transfer facility in Oklahoma following nearly two years behind bars. The move comes after Bankman-Fried was reportedly placed in solitary confinement earlier this month for giving an unauthorized interview to Tucker Carlson. His incarceration began in August 2023, after Judge Lewis Kaplan revoked his bail due to allegations of witness tampering involving leaked diary entries from former Alameda CEO Caroline Ellison, who was a key witness in the case.