FTX to distribute $1.6 billion to creditors as recovery efforts surpass $7 billion
FTX, the once-dominant cryptocurrency exchange that collapsed in 2022, is set to distribute $1.6 billion to creditors starting September 30, 2025. This marks a significant milestone in the ongoing U.S. bankruptcy proceedings, with repayments overseen by a court-appointed recovery team.
A structured repayment plan
The upcoming distribution will only include creditors who have completed identity verification through FTX’s claims portal. Payments will be processed via providers such as BitGo, Kraken, and Payoneer. This third round of distributions follows earlier payouts totaling over $6 billion, placing FTX among the largest bankruptcy recoveries in the cryptocurrency sector.
The recovery plan divides creditors into categories, each with specific repayment rates. U.S. customers will receive 40% of their claims in this round, bringing their total recovery close to 95%. International users on FTX’s main platform, known as “dotcom” customers, will see their cumulative recovery reach approximately 78% with an additional 6% payment.
General unsecured creditors and digital asset loan claimants are set to receive 24%, raising their overall recovery to 85%. Smaller claims, referred to as “convenience claims,” will be paid up to 120% of their face value, providing full reimbursement plus additional compensation to the smallest creditors.
The collapse and aftermath
FTX’s downfall in November 2022 was triggered by a liquidity crisis and the misuse of billions in customer deposits. The crisis revealed that funds were improperly diverted to Alameda Research, a trading firm founded by FTX’s former CEO, Sam Bankman-Fried. This mismanagement led to the platform’s inability to fulfill withdrawal requests, erasing billions in customer wealth and shaking trust in the cryptocurrency sector.
FTX filed for Chapter 11 bankruptcy in the U.S., initiating a complex legal process to identify assets and compensate creditors. Following his conviction in 2023 on charges of fraud and conspiracy, Bankman-Fried was sentenced to prison.
Since then, a recovery team under new management has worked to recover assets, liquidate investments, and pursue legal claims to bolster repayments. The case remains one of the most scrutinized in the digital asset industry.
Challenges in valuation
A key challenge in the repayment process has been the valuation of claims. Under U.S. bankruptcy rules, claims are based on cryptocurrency prices from November 2022, when FTX filed for bankruptcy. This approach has sparked disputes, as asset values were significantly lower at that time compared to 2025 levels. However, courts have upheld this valuation method as consistent with bankruptcy law.
The recovery estate has maximized repayments by liquidating assets, pursuing lawsuits, and securing settlements with third parties linked to FTX and Alameda Research. These efforts have enabled an unusually high level of creditor recovery compared to other large bankruptcy cases.
A significant milestone
With the upcoming $1.6 billion distribution, total repayments to creditors will exceed $7 billion. While some creditors remain dissatisfied with the valuation framework, the scale of recovery demonstrates progress in addressing one of the most significant financial failures in cryptocurrency history.
