Creditors Eye Fresh Cash as FTX Prepares New Disbursement
FTX is moving ahead with a $1.9 billion creditor payout set for September 30, according to a statement released on Wednesday. The court overseeing the bankruptcy has approved a reduction in FTX’s claims reserve from $6.5 billion to $4.3 billion, effectively freeing up the funds for the next wave of distributions. Although the exchange didn’t specify the precise amount each claimant would receive in this round, the record date for eligible claim holders has been locked in for August 15.
This is the third major distribution from the collapsed crypto exchange, following two earlier disbursements totaling $6.2 billion — $1.2 billion in February and another $5 billion in May. With this upcoming wave, FTX inches closer to its total repayment goal of between $14.7 billion and $16.5 billion.
Most Creditors Set to Receive More Than They Lost
FTX claims that 98% of creditors will receive at least 119% of their claim’s original value, calculated based on prices at the time of bankruptcy in 2022. While this news has been welcomed by many, others remain frustrated. Some critics argue that the crypto market has significantly appreciated since the bankruptcy, leaving early claim valuations far below current market rates.
Still, the promised full recovery and more for most creditors marks a rare outcome in bankruptcy proceedings, particularly in the chaotic world of crypto collapses. Payments will be processed via BitGo, Kraken, and Payoneer, with the potential to inject fresh liquidity into digital asset markets, especially altcoins.
Controversy Brews Over Restricted Jurisdictions
Meanwhile, a separate legal move by the FTX Recovery Trust sparked backlash earlier this month. A July 4 court motion sought permission to block or reverse claims from users in “restricted jurisdictions,” including China, Russia, Saudi Arabia, and Pakistan. The motion asked for the "immediate forfeiture" of claims from users in these countries due to compliance issues.
However, after several creditors pushed back with formal objections, the bankruptcy court took action. During a hearing this week, the judge directed FTX to revise the proposal. The updated plan must now remove the clause enabling automatic forfeiture and allow affected users to transfer their claims to be processed through jurisdictions where distributions are legal.
Big Liquidity Injection Expected for Altcoins
The September payout is being closely watched by traders. With roughly $1.9 billion about to enter the ecosystem, some expect a spike in crypto trading volume. While the largest creditors may simply cash out, others could reallocate their funds back into digital assets, potentially fueling a new rally in altcoins or tokens hit hardest by the market downturn.
Despite ongoing controversies, FTX’s recovery efforts are progressing. With another major payment on the horizon, creditors are finally seeing the light at the end of a long and painful tunnel.
