FTX Trust Cuts Disputed Claims Reserve by $1.9B to Enable Next Payout by Sept 30

The FTX Recovery Trust has announced that creditors will receive the next round of payouts by September 30, with August 15 designated as the record date for eligibility. This distribution targets holders of allowed Class 5 Customer Entitlement Claims, Class 6 General Unsecured Claims, and Convenience Claims that became allowed post-previous cutoffs but remain unpaid. The trust also secured court approval to reduce its disputed claims reserve by $1.9 billion, trimming it from $6.5 billion to $4.6 billion. This adjustment liberates additional liquidity for the distribution, which will be administered by BitGo, Kraken, and Payoneer [1].

Eligible creditors must satisfy pre-distribution requirements, including Know Your Customer (KYC) checks, submission of tax forms, and onboarding processes before funds are disbursed. The trust emphasized that once payments are transferred to selected platforms, account management responsibilities shift to those providers. Additionally, transfers of claims are contingent on assignments being finalized in the official register by the August 15 deadline, following a 21-day objection period [1].

This payout marks a continuation of the trust’s efforts to resolve obligations since FTX’s collapse in late 2022. A prior round on May 30 disbursed nearly $5 billion, addressing claims of $50,000 or less with 9% annual interest accrued since November 2022 [1]. The trust also reiterated that wallet connections are not required to verify eligibility, countering concerns about technical barriers for claimants.

The timeline reflects months of reconciliation, asset sales, and legal proceedings to determine repayment priorities. The reduction in the disputed claims reserve underscores the progress made in resolving uncertainties, though challenges remain in finalizing complex claims. Creditors must act swiftly to complete compliance steps, as delays could exclude them from the distribution. The involvement of third-party administrators like BitGo and Kraken highlights the trust’s reliance on external infrastructure to ensure timely and secure fund transfers.

The ongoing process illustrates the scale of FTX’s bankruptcy resolution, balancing the need for transparency with operational efficiency. By prioritizing claims with established records, the trust aims to streamline distributions while maintaining legal safeguards. However, the exclusion of claims not yet fully validated or transferred underscores the remaining hurdles in achieving comprehensive resolution. The focus on administrative efficiency—such as reducing reserves to fund payouts—demonstrates a strategy to expedite returns to creditors amid prolonged legal scrutiny.

Source: [1] [FTX creditors to receive next round of payouts by Sept 30] [https://cryptoslate.com/ftx-creditors-to-receive-next-round-of-payouts-by-sept-30/]