FTX Recovery Trust is set to distribute over $5 billion to creditors on May 30 as part of the company’s Chapter 11 Plan of Reorganization, according to a statement issued by the Trust on May 15. This distribution will mark the second official payment round since FTX entered bankruptcy proceedings and will reach eligible claimants through designated Distribution Service Providers, BitGo and Kraken, within one to three business days of the release date.
Plan Administrator John J. Ray III described the distributions as a crucial step in executing one of the most complex creditor payment operations to date, given the extensive creditor base. He commended the professional recovery teams for successfully navigating the large-scale coordination effort. The upcoming payouts on May 30 follow an earlier round of distributions that began in February for smaller creditors.
In the initial phase, claimants with approved amounts under $50,000 started receiving full reimbursements along with 9% annual interest accrued since the bankruptcy filing in November 2022. Customers who onboarded with BitGo or Kraken as their selected provider will receive their payments directly from these platforms. By onboarding, customers waived their right to receive direct cash distributions from FTX and instructed the firm to remit funds to their chosen provider.
The Trust will announce future payment dates as the process progresses. According to the terms outlined in the reorganization plan’s payment hierarchy, different classes of creditors will receive varying percentages of the allocated funds. Class 5A Dotcom Customer Entitlement Claims will receive a 72% payout, while US-based Class 5B Customer Entitlement Claims will receive 54%. Class 6A General Unsecured Claims and Class 6B Digital Asset Loan Claims will receive 61%, while Class 7 Convenience Claims will be paid out at 120%.
While the first wave of distributions fully repaid small creditors, those with claims above $50,000 are scheduled to receive distributions in upcoming rounds. A total of $16 billion has been allocated for repayments. Some creditors have expressed frustration with the wait, but bankruptcy filings indicate that the estate recovered more than initially projected, enabling broader and deeper repayment efforts than originally anticipated.