FTX creditors will receive $1.6 billion on Sept. 30 in the third major distribution since the exchange’s 2022 collapse, bringing some customers to 95% cumulative recovery rates.
According to the FTX Recovery Trust’s Sept. 19 announcement, creditors must complete multiple verification steps through the FTX Customer Portal before receiving payments, which take one to three business days.
Requirements include KYC verification, tax form submission, and selecting among BitGo, Kraken, or Payoneer to receive the funds. The process ensures compliance with anti-money laundering regulations while providing payment flexibility.
Waterfall priorities
Payment amounts vary by creditor class under the reorganization plan’s waterfall priorities. Dotcom customer entitlement claims receive an incremental 6% distribution, reaching a cumulative recovery of 78%.
US customer entitlement claims obtain 40% payments, achieving 95% total recovery. General unsecured claims and digital asset loan claims each receive 24% distributions, bringing cumulative recovery to 85%.
The Recovery Trust emphasized that no wallet connections are required for eligibility verification or reimbursement processing. This clarification addresses potential confusion amid ongoing concerns about crypto fraud affecting bankruptcy proceedings.
Transferred claims face additional requirements, with distributions only processed for transferee holders reflected on the official claims register after a 21-day notice period without objections.
Recovery timeline and previous distributions
The September payout follows two previous distribution rounds totaling approximately $5 billion in creditor repayments.
The second distribution occurred on May 30, addressing creditors with claims valued at $50,000 or less while adding 9% annual interest accrued since the November 2022 bankruptcy filing. Initial distributions began on Feb. 18, establishing the recovery framework.
Convenience class creditors receive 120% distributions, representing full recovery plus additional compensation for smaller claims. The overpayment structure aims to expedite resolution for lower-value creditors while reducing administrative costs associated with extended proceedings.
FTX announced that subsequent record and payment dates will be announced as proceedings continue. The structured approach enables systematic distribution while maintaining adequate reserves for ongoing legal costs and administrative expenses.
The distribution represents continued progress in one of the crypto industry’s largest bankruptcy cases, following a collapse that sent shockwaves through the sector.
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