FTX to start next creditor payout on Sep. 30 with $1.9 billion granted by court
FTX announced Wednesday that it is expected to start distributing the next batch of creditor claims on Sep. 30. The record date for claim holders is set for Aug. 15.
Its latest announcement also revealed that the bankruptcy court gave the greenlight to cut down the claims reserve from $6.5 billion to $4.3 billion, which releases $1.9 billion to be distributed to holders in the upcoming disbursement. However, it did not explicitly state how much would be allocated for the Sept. 30 distribution.
FTX has so far handed out approximately $6.2 billion to former customers across two distributions — $1.2 billion in February and $5 billion in May this year. The overall repayment plan aims to distribute between $14.7 billion and $16.5 billion, with recoveries varying based on claim type and valuation.
Around 98% of the creditors are expected to receive at least 119% of their claims based on the value at the time of the bankruptcy. Some creditors have criticized the plan, noting that the overall crypto market has significantly appreciated in value since the bankruptcy in 2022.
The payout is expected to be made through BitGo, Kraken and Payoneer. Traders anticipate that these FTX distributions could inject significant liquidity into the crypto market, especially for altcoins.
Meanwhile, the FTX Recovery Trust submitted a motion on July 4 requesting the court to authorize the implementation of new measures to assess creditor claim distributions in restricted jurisdictions overseas.
The motion sought to immediately forfeit and reverse claims in countries designated as "restricted jurisdictions," where distributions would be deemed illegal. Potentially affected countries included China, Russia, Saudi Arabia, and Pakistan. The proposal drew backlash and formal objections from creditors in those regions.
At a hearing on Tuesday, the court acknowledged the objections to the proposed motion and ordered FTX to revise it —removing the clause that would allow for the "immediate" forfeiture of claims and adding an option for creditors in restricted regions to transfer and receive their claims through a different jurisdiction, according to an X post by FTX Historian.
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