FTX creditors are set to receive a significant payout of $1.6 billion on September 30th as part of the third major distribution following the exchange’s collapse in 2022. This distribution brings some customers close to a 95% cumulative recovery rate, marking a positive step forward in the bankruptcy proceedings.
In order to receive their payments, creditors must complete various verification steps through the FTX Customer Portal. These steps include KYC verification, submitting tax forms, and selecting a payment method from options such as BitGo, Kraken, or Payoneer. This process not only ensures compliance with anti-money laundering regulations but also provides flexibility for creditors to choose how they receive their funds.
The payment amounts vary depending on the creditor class and the reorganization plan’s waterfall priorities. Dotcom customer entitlement claims will receive an incremental 6% distribution, bringing their cumulative recovery rate to 78%. US customer entitlement claims will receive 40% payments, reaching a 95% total recovery rate. General unsecured claims and digital asset loan claims will each receive 24% distributions, bringing their cumulative recovery rates to 85%.
It is important to note that no wallet connections are required for eligibility verification or reimbursement processing, addressing concerns about potential crypto fraud affecting the bankruptcy proceedings. Transferred claims have additional requirements, with distributions only processed for transferee holders listed on the official claims register after a 21-day notice period without objections.
The September distribution follows two previous rounds totaling approximately $5 billion in creditor repayments. The second distribution, which took place on May 30th, focused on creditors with claims valued at $50,000 or less and included 9% annual interest accrued since the bankruptcy filing in November 2022. The initial distributions began on February 18th, establishing the framework for recovery.
Convenience class creditors will receive 120% distributions, representing full recovery plus additional compensation for smaller claims. This overpayment structure aims to expedite resolution for lower-value creditors and reduce administrative costs associated with prolonged proceedings. FTX has announced that subsequent record and payment dates will be revealed as the proceedings continue, ensuring a systematic distribution process while maintaining reserves for legal costs and administrative expenses.
Overall, this distribution represents significant progress in one of the crypto industry’s largest bankruptcy cases, showcasing the resilience and determination of stakeholders in the face of adversity.