FTX to Distribute Over $5B to Creditors Starting May 30

This second phase of repayments follows a $1.2 billion initial distribution and aims to return funds to users affected by the exchange's 2022 collapse

FTX, the bankrupt cryptocurrency exchange, is set to distribute over $5 billion to creditors starting May 30, 2025, as part of its Chapter 11 bankruptcy plan. This second phase of repayments follows a $1.2 billion initial distribution and aims to return funds to users affected by the exchange’s 2022 collapse, with some creditors receiving up to 120% of their claims.

FTX's Bankruptcy Recovery Plan

FTX will begin its second wave of creditor repayments on May 30, 2025, distributing more than $5 billion in recovered funds. This follows the first phase in February 2025, which paid out $1.2 billion to creditors with claims under $50,000. The FTX Recovery Trust, led by plan administrator John J. Ray III, has described this as an “unprecedented distribution process” due to the scale and complexity of the creditor base.

The bankruptcy estate has recovered between $14.7 billion and $16.5 billion, enough to repay 98% of creditors at least 118% of their claim values as of November 2022, when FTX filed for bankruptcy.

The repayments will be facilitated by crypto platforms BitGo and Kraken, with funds expected to reach eligible creditors within one to three business days. Four creditor groups will receive distributions, with payouts ranging from 54% to 120% of their holdings' value at the time of FTX’s collapse.

For instance, creditors in Class 5, including lenders and trading partners of Alameda Research, will receive 54% to 72%, while those with intercompany claims could see up to 120%.

Creditors Reinvest in Crypto

Nearly 80% of FTX creditors who received repayments in the first phase have reinvested their funds into cryptocurrencies, particularly Bitcoin and altcoins like Solana, according to data from NFT Evening, observed as of April 2025.

This reinvestment trend signals strong confidence in the crypto market's recovery, considering FTX's collapse triggered a crypto winter that saw Bitcoin's price drop to $16,000 in November 2022.

By May 2025, Bitcoin BTC trades at approximately $104,000, highlighting the significant market rebound creditors missed due to repayments being calculated at 2022 valuations.

However, not all creditors are satisfied. The “dollarization” process, which assigns claims a dollar value based on November 2022 crypto prices, has sparked debate. For example, Bitcoin was valued at $20,000 when FTX collapsed, meaning creditors receive fiat equivalents far below current market values. Solana SOL, a major holding in FTX's portfolio, was priced at $17 in 2022 but now trades near $170, amplifying losses for some creditors.

Challenges in the Repayment Process

The repayment process has faced hurdles, including a June 1, 2025, deadline for nearly 400,000 creditors to complete Know Your Customer (KYC) verification. Approximately 392,000 users risked losing $2.55 billion in claims due to incomplete KYC, though the deadline was extended from March 3 to provide relief. Technical issues with the KYC portal have also frustrated users, prompting guidance from FTX's support team to reapply via email and the support portal.

The $5 billion distribution could inject liquidity into the crypto market, which will potentially boost Bitcoin and altcoin prices. However, analysts remain cautious, noting that trust issues and market dynamics may temper bullish expectations.