The FTX Recovery Trust has announced that it will commence the second phase of creditor repayments on May 30, distributing over $5 billion to eligible claimants. This follows the initial round of reimbursements in February, which returned approximately $1.2 billion to creditors. The forthcoming payments are expected to be processed within one to three business days through cryptocurrency firms BitGo and Kraken.
Under the reorganization plan, five groups categorized as “convenience classes” are set to receive distributions ranging from 54% to 120% of their adjudicated claims. While not all account holders will be reimbursed in this round, the trust has indicated that the repayment schedule for the next class of creditors will be announced in due course. The total amount to be disbursed could reach up to $16 billion if all claims are filed.
Despite the progress in repayments, some former FTX users have criticized the reorganization plan for basing disbursements on cryptocurrency prices at the time of the exchange’s bankruptcy in November 2022. Since then, the price of Bitcoin has surged by more than 400%, from approximately $20,000 to over $100,000. Nevertheless, the recovery plan anticipates that 98% of creditors will receive at least 118% of their initial claim value in cash.
This development comes more than two and a half years after FTX filed for bankruptcy. In the interim, former CEO Sam Bankman-Fried was found guilty of misusing customer funds and sentenced to 25 years in prison. Other executives, including former Alameda Research CEO Caroline Ellison and former FTX Digital Markets co-CEO Ryan Salame, have also been sentenced for their roles in the collapse.
