FTX creditors await US$5bn distribution

Collapsed cryptocurrency exchange FTX is set to pay out US$5 billion to creditors starting May 30.

The proceeds will be distributed via the FTX Recovery Trust to eligible creditors either on BitGo or Kraken.

This is the second round of distributions made by FTX, which made its first round in early 2025 for amounts less than US$50,000.

John Ray III, the plan administrator of the FTX Recovery Trust, said: "These first non-convenience class distributions are an important milestone for FTX. The scope and magnitude of the FTX creditor base makes this an unprecedented distribution process, and today's announcement reflects the outstanding success of the recovery and coordination efforts of our team of professionals. Our focus remains on recovering more for creditors and resolving outstanding claims."

FTX founder Sam Bankman-Fried is currently serving 25 years in prison after being indicted on several criminal charges, including fraud and money laundering. He reportedly stole US$10 billion from investors.

FTX filed for bankruptcy in 2022. Ray, a lawyer and insolvency specialist, was shortly named FTX's chief executive and mandated to recover the funds.

In 2023, Ray released a report detailing FTX's control failures under Bankman-Fried's leadership in the areas of management and governance, finance and accounting, digital asset management, information security and cybersecurity.

"In this report, we provide details on our findings that FTX Group failed to implement appropriate controls in areas that were critical for safeguarding cash and crypto assets. FTX Group was tightly controlled by a small group of individuals who falsely claimed to manage FTX Group responsibly, but in fact showed little interest in instituting oversight or implementing an appropriate control framework. We are continuing our efforts to review the events that factored into the fall of FTX and to identify and recover as much value as possible for creditors," Ray said at the time.

In the second round of payments, creditors will receive a distribution based on waterfall priorities: Dotcom customer entitlement claims will receive a 72% distribution; customer entitlement claims will receive 54%; general unsecured claims and 6B digital asset loan claims will each get 61%; and convenience claims are entitled to 120%.