FTX has announced that it will distribute USD 1.6 billion to creditors by September 30, with liquidity concerns impacting market sentiment despite price fluctuations.
Following this announcement, FTX’s third distribution to creditors, scheduled for the 30th of September 2025, marks an important moment in its bankruptcy process. With USD 1.6 billion to be paid out, the move has sparked multiple speculations about its potential to influence the broader cryptocurrency market. While some see the influx of liquidity as a boost, several questions about the manner in which the payout is valued compared to current crypto prices still persist.
FTX Recovery Trust is set to initiate the third phase of creditor payments under its Chapter 11 reorganisation plan, and the distribution will follow earlier payouts totaling over USD 6 billion since the exchange’s collapse in late 2022. With this in mind, eligible creditors, after completing KYC verification and tax submissions, are expected to receive their payments through service providers such as BitGo, Kraken, or Payoneer.
More information on FTX’s repayment of USD 1.6 billion to creditors
According to CoinCentral, the distribution process will follow a `waterfall` payout structure, which will prioritise certain groups of creditors over others. US customers (Class 5B) are set to receive a 40% payout, bringing their cumulative recovery to 95%. At the same time, dotcom customers (Class 5A) will receive an additional 6%, increasing their total to 78%. This will take place as general unsecured claims (Class 6A) and digital asset loan claims (Class 6B) will each see 24%, raising their overall recoveries to 85%. Convenience claims (Class 7) will be paid at 120%, which will exceed the face value of their obligations.
One major issue raised by creditors is represented by the valuation model used for the distribution. Repayments will be calculated using November 2022 crypto asset prices, which were much lower than current levels, as multiple critics argue this method undercompensates creditors who could have realised higher returns in the market’s recovery. Despite the court’s decision to uphold the valuation model, many affected parties feel dissatisfied, with some creditors arguing that adjusting for the recent surge in crypto prices would provide fairer compensation. However, multiple legal experts suggest that any changes to the distribution methodology may face several challenges and difficulties, given the legal framework that is already in place.
Alongside valuation concerns, other challenges are complicating the FTX creditor payouts. This include a court filing earlier this year sought to freeze 5% of claims in 49 jurisdictions, including China, due to regulatory uncertainties. While this issue does not directly affect the upcoming distribution process, it highlights the ongoing legal hurdles that could delay future payouts or complicate the overall strategy. At the same time, the third distribution also follows the process of the FTX token (FTT), which has experienced volatility. Although the token has seen a surge in value, it still remains far below its all-time highs. Despite this initiative, there is speculation that the release of funds could drive further price movements in the overall cryptocurrency market, which could potentially aid in the process of stabilising asset prices over the coming months.
