FTX Payout to Creditors Starts on Sep. 30

FTX announced that it will begin distributing the next round of creditor claims on September 30, with the record date set for August 15. The bankruptcy court has approved a reduction of the claims reserve from $6.5 billion to $4.3 billion, allowing $1.9 billion to be released for distribution. However, the exact amount for the upcoming payout has not been disclosed. So far, FTX has distributed approximately $6.2 billion to its former customers, with payouts of $1.2 billion in February and $5 billion in May of this year. The total repayment plan aims to return between $14.7 billion and $16.5 billion, depending on the type and valuation of claims. Around 98% of creditors are expected to recover at least 119% of their claims based on pre-bankruptcy valuations. Nonetheless, some creditors have voiced concerns, pointing out that the overall cryptocurrency market has grown significantly since FTX’s bankruptcy in 2022. The upcoming distribution will be facilitated through BitGo, Kraken, and Payoneer, with traders anticipating that these payouts might significantly boost liquidity in the crypto market, particularly for altcoins. Additionally, the FTX Recovery Trust filed a motion on July 4 to seek court approval for new measures to handle claim distributions in restricted jurisdictions abroad. The motion sought to immediately forfeit claims in countries deemed illegal for distribution, such as China, Russia, Saudi Arabia, and Pakistan. This proposal was met with backlash and formal objections from creditors in those countries. During a court hearing on Tuesday, objections were acknowledged, leading the court to instruct FTX to revise its motion. The court requested the removal of a clause allowing for immediate forfeiture and proposed to give creditors in restricted regions the option to transfer claims through alternative jurisdictions.