FTX to Distribute $5 Billion to Creditors in Second Distribution

FTX's bankruptcy advisers said Thursday (May 15) that they will distribute $5 billion to the former cryptocurrency exchange's eligible creditors on May 30.

Bankrupt cryptocurrency exchange FTX will distribute $5 billion to its eligible creditors on May 30, the company’s bankruptcy advisers said Thursday.

The distribution will be the second payment made to creditors, and additional record and payment dates will be announced later, FTX said in a Thursday press release.

In this distribution, different classes of creditors will receive between 54% and 120% of what they are owed, according to the release.

“These first non-convenience class distributions are an important milestone for FTX,” Plan Administrator of the FTX Recovery Trust John J. Ray III said in the press release. “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.”

Ray added in the release that the advisers are still working to recover more for creditors and resolve outstanding claims.

Customers of the former crypto company will be fully repaid what they were owed when it declared bankruptcy in November, although they will miss out on the increased value digital assets have seen since that time, Bloomberg reported Thursday.

As of last June, FTX had about $12.6 billion, according to the report. Because its advisers are selling the platform’s assets and suing firms that owe it money, that total could rise to as much as $16.5 billion, per the report.

FTX announced its initial distributions in February, with Ray saying at the time that the advisers would continue their recovery efforts and return funds to additional classes of creditors.

In April, they said that they had launched legal action against two token and coin issuers, alleging that they held assets that belong to FTX, and that they were contacting other issuers and planned to file more suits against those who don’t respond.

“Our team continues to work tirelessly to maximize recoveries for the FTX Estate and return funds to creditors, including by filing two complaints against issuers who have repeatedly ignored our attempts to engage,” the advisers said at the time in a press release.

It was reported in November that FTX was suing cryptocurrency giant Binance (CRYPTO: BNB) and its former CEO and was suing several other defendants to claw back money it alleged was owed to creditors.