FTX Starts $900M Creditor Distribution as Repayments Near $10B

TLDR

• FTX started its fifth creditor distribution of about $900M on July 31.
• Eligible creditors should receive payments within one to three business days.
• Payments are being processed through BitGo, Kraken, and Payoneer.
• International and U.S. customer claims are set to reach 105% recovery.
• FTX also reached a nearly $165M settlement tied to Junho Bang’s estate.

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FTX started its fifth creditor distribution on July 31, sending about $900 million to eligible claimants as the failed exchange continues its bankruptcy repayment process.

FTX Begins Fifth Creditor Payout

The latest distribution applies to allowed Convenience and Non-Convenience claims under FTX’s Chapter 11 plan. Eligible creditors had to meet the June 16 record date and complete all required pre-distribution steps.

Payments are being processed through BitGo, Kraken, and Payoneer. FTX said eligible claimants should receive funds within one to three business days from July 31.

The new payout lifts total repayments since the FTX wind-down began to nearly $10 billion. Many creditors are now set to recover more than the value of their claims based on the bankruptcy filing date.

International Dotcom customer claims are expected to reach a 105% cumulative recovery after this round. U.S. customer claims are also expected to reach 105% after the latest payment.

General unsecured claims and digital asset loan claims are expected to reach 103% cumulative recovery. Convenience claims are listed at a 120% cumulative distribution, although final percentages may vary slightly due to rounding.

Onboarding Deadline Creates Six-Month Window

FTX has separated allowed-claim status from payment readiness. A claim may be allowed, but payment still depends on tax forms, provider onboarding, and sanctions checks.

Creditors who missed the June 16 eligibility requirements will not receive the July 31 distribution. Claimants also needed to complete know-your-customer checks under the plan before the record date.

Allowed claim holders who have not completed provider onboarding now face a six-month deadline from July 31. Failure to complete onboarding during that period may result in forfeiting distribution rights.

Tax forms follow a separate timeline under the FTX plan. Creditors who fail to submit valid tax documents within the required period may also lose access to their distribution.

FTX’s preferred equity process is separate from the Chapter 11 creditor payout. The Preferred Shareholder Remission Fund Trust is scheduled to make a second payment of $18 million.

That payment brings total preferred-equity distributions to $95 million. FTX Digital Markets also continues to handle the Bahamas process under separate terms.

Estate Reaches $165M Settlement

FTX’s recovery process also includes a nearly $165 million settlement filed in Delaware bankruptcy court. The deal involves the FTX Recovery Trust and Soogeun Oh, the court-appointed receiver for Junho Bang’s estate.

Bang, a convicted South Korean fraudster, was linked to funds deposited into high-volume trading accounts on FTX. Those assets came from a June 2022 crypto investment program involving customer funds.

The settlement routes recovered funds toward victims through South Korean insolvency and rehabilitation proceedings. The agreement bars Bang and his affiliates from receiving any proceeds from the payout.

The arrangement aims to ensure distributions reach valid creditors, rather than the parties tied to the alleged fraud. The filing adds another recovery channel alongside FTX’s broader creditor repayment plan.

FTX collapsed in 2022, leaving customers and creditors seeking repayment through bankruptcy. The fifth distribution marks another step in the estate’s attempt to return funds while enforcing claim, tax, and onboarding rules.