FTX’s bankruptcy proceedings are progressing, with the exchange set to begin its next round of creditor repayments at the end of September. Nearly three years after FTX’s collapse in late 2022, this marks a significant step forward for creditors still awaiting compensation.
According to a July 23 statement, the upcoming distribution will start on or around September 30, 2025. It will apply to holders of approved Class 5 (Customer Entitlement Claims), Class 6 (General Unsecured Claims), and certain Convenience Claims. To be eligible, creditors must be on record by August 15, 2025.
This development follows a recent court ruling that lowered FTX’s disputed claims reserve from $6.5 billion to $4.3 billion, freeing up $1.9 billion in cash. The additional funds will be included in the upcoming payout to qualifying creditors.
Court Approval Unlocks Funds for Next Distribution
FTX’s upcoming creditor payouts will be facilitated by its designated Distribution Service Providers: BitGo, Kraken, and Payoneer. To receive payment, claimants must complete know-your-customer (KYC) verification, submit necessary tax documents, and be properly registered by the August 15, 2025, deadline.
The $1.9 billion cash release was approved by the U.S. Bankruptcy Court in Delaware, following the October 2024 confirmation of FTX’s comprehensive reorganization plan. That plan allows for up to $16.5 billion in total repayments, including full principal and 9% interest for most non-governmental creditors.
While this marks meaningful progress, challenges remain—particularly in jurisdictions facing legal or regulatory barriers. Countries like China and Russia, which together account for nearly $470 million in claims, are among the most affected. Some creditors in these regions are considering legal action over exclusions, and several legal objections to the distribution process are still being reviewed.
Creditors Frustrated by Valuation Method
FTX is repaying creditor claims based on the value of crypto assets at the time of its bankruptcy filing in November 2022, when Bitcoin was priced between $16,000 and $20,000. With Bitcoin now trading around $120,000 and many altcoins seeing substantial gains, some creditors feel they are being shortchanged amid the broader crypto market recovery.
This has led several claimants to file lawsuits, arguing that FTX’s terms of service entitle them to compensation based on current market prices. However, the bankruptcy court has consistently upheld the use of the original dollar-based valuation model from the time of the collapse.
Although FTX has managed to recover up to $16.5 billion in assets, the exchange had effectively lost nearly all customer-held crypto by the time it filed for bankruptcy—retaining only 0.1% of its Bitcoin and 1.2% of its Ethereum holdings.
