FTX Distributes $900M More to Creditors

FTX, the now-defunct cryptocurrency exchange, is preparing its fifth creditor distribution, allocating an additional $900 million to those affected by its collapse. This brings the total announced repayments to over $10 billion, nearly four years after the company filed for Chapter 11 bankruptcy. The distribution is scheduled to begin on July 31, with eligible creditors receiving funds through BitGo, Kraken, or Payoneer.

The repayment amounts vary based on creditor classification. Users of the global and U.S. exchanges are slated to receive an additional 9% of their approved claims, bringing their total recovery to 105%. General unsecured creditors and crypto loan holders will see a 3% increment, reaching a total of 103%. Notably, convenience-class creditors, typically those with smaller claims, are expected to receive 120% of their approved amounts.

However, these repayments are calculated in U.S. dollars based on crypto prices around the time of FTX's bankruptcy in November 2022. This means that while creditors may receive over 100% of their claim's dollar value at that time, the current market value of the underlying cryptocurrencies could be significantly higher, leaving many users with less than the full value of their assets as they stood today. FTX also plans to distribute $18 million to preferred shareholders, adding to their separate trust fund.