FTX Recovery Trust To Disburse $1.6 Billion In Latest Creditors' Payout

By: Eliza Bennet

The FTX Recovery Trust is preparing for its third significant distribution to creditors impacted by the 2022 collapse of the FTX exchange, with disbursement scheduled for September 30th. This third distribution will amount to a total of $1.6 billion, bringing some creditors closer to substantial recovery percentages. These repayments are part of ongoing efforts to dispense up to $16.5 billion in total creditor claims.

Eligible creditors are required to fulfill pre-distribution criteria, including KYC verification and tax form submission, through the FTX Customer Portal. This process ensures compliance with anti-money laundering regulations, offering payment flexibility through trusted partners like BitGo, Kraken, and Payoneer. Notably, distributions will apply according to specified 'waterfall priorities' under the recovery plan. This means that Dotcom Customer Entitlement Claims will see a 6% increase, reaching 78% of recovery, while US Customer Entitlement Claims will enjoy a 40% increase, achieving an impressive 95% total recovery. Likewise, General Unsecured Claims and Digital Asset Loan Claims will each receive a 24% distribution, bringing their cumulative recovery to 85%.

Importantly, creditors will not need to link any wallets for verification or reimbursement processes, addressing concerns of fraud and ensuring a smoother claim process. Additionally, those with transferred claims will face added requisites, with distributions only proceeding following a 21-day notice period devoid of objections. This latest payout follows two previous waves that distributed approximately $5 billion, with previous distributions prioritizing smaller claims with significant interest accrued since the November 2022 bankruptcy filing.

Furthermore, the FTX native token, FTT, has experienced significant price activity in anticipation of the distribution, seeing a price surge of 22% over the past week according to CoinGecko. While the token's price fluctuations reflect increased market interest, it remains a far cry from its all-time high. This movement highlights ongoing volatility in the crypto market, as stakeholders continue to navigate the complex landscape of crypto recoveries and investments following one of the industry's significant collapses.