FTX creditors will receive $1.6 billion from the now-defunct crypto exchange’s estate as the third wave of payouts takes place on September 30 as part of its ongoing Chapter 11 reorganization process, the FTX Recovery Trust announced Friday.
FTX Initiates Third Round Of Payments To Its Creditors
Both the exchange’s convenience and non-convenience classes will receive funds. The convenience class generally refers to the retail traders and smaller creditors who make up the majority (up to 99%) of FTX’s creditor base, while the non-convenience designation involves larger or more intricate claims.
Eligible creditors will receive their funds through service providers BitGo, Kraken, or Payoneer within three business days. These platforms will send the funds to creditors within three business days from September 30.
U.S. customer claims will receive 40% in the latest distribution, bringing their total recovery so far to 95%, according to the press release from the Trust, which is overseeing assets and claims from the exchange’s bankruptcy estate.
Convenience claims will receive a 120% reimbursement, exceeding the face value of what was owed. “Dotcom” customers, users of the exchange’s international arm, will see an additional 6% payout, for 78% in cumulative distributions. General unsecured and digital asset loan claims are set for a 24% payout, raising recoveries to 85%.
The FTX Downfall
The implosion of the FTX exchange in 2022 sent shockwaves through the cryptoverse and exacerbated the crypto winter that had started at the beginning of that year.
The FTX Recovery Trust first announced it would execute its distribution plan in October 2024. Reimbursements to creditors kicked off in February with a $1.2 billion payout, and were followed by a $5 billion distribution later in May. The trust has up to $16.5 billion in recovered funds set to be sent out to its creditors and former customers.
The third tranche of claims distributions comes amid signs that FTX’s multi-billion-dollar collapse has vanished in the public memory, amid the United States government’s pro-crypto pivot under President Donald Trump.
Meanwhile, Sam Bankman-Fried, the founder and ex-CEO of the collapsed exchange, is currently serving a 25-year prison sentence after he was convicted of seven charges, including wire fraud, wire fraud conspiracy, securities fraud, commodities fraud conspiracy, and money laundering conspiracy.
Source: https://zycrypto.com/ftx-will-hand-out-1-6-billion-in-bankruptcy-repayments-this-month/
