FTX Set to Distribute $5 Billion to Creditors on May 30
FTX, the once-thriving cryptocurrency exchange, is set to distribute over $5 billion to creditors starting May 30, 2025, as part of its Chapter 11 bankruptcy plan. This significant payout aims to return funds to users affected by FTX's collapse in 2022, with some creditors expected to receive up to 120% of their claims.
The repayments, facilitated by crypto platforms BitGo and Kraken, are expected to reach eligible creditors within one to three business days. This is the second phase of repayments, following a $1.2 billion initial distribution in February 2025. Four creditor groups will receive distributions, with payouts ranging from 54% to 120% of their holdings' value at the time of FTX's collapse. The $5 billion distribution could inject liquidity into the crypto market, potentially boosting Bitcoin and altcoin prices. Nearly 80% of FTX creditors who received repayments in the first phase have reinvested their funds into cryptocurrencies, particularly Bitcoin and altcoins like Solana. By May 2025, Bitcoin trades at approximately $104,000, highlighting the significant market rebound creditors missed due to repayments being calculated at 2022 valuations. The repayment process has faced challenges, including a June 1, 2025, deadline for nearly 400,000 creditors to complete Know Your Customer (KYC) verification, with approximately 392,000 users risking losing $2.55 billion in claims due to incomplete KYC.
The FTX Recovery Trust has recovered between $14.7 billion and $16.5 billion, enough to repay 98% of creditors at least 118% of their claim values as of November 2022. The upcoming $5 billion distribution is a major step towards compensating creditors for their losses and reinvigorating the crypto market.
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