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FTX to distribute $900M to creditors in fifth payment round
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- DeepHorus
The FTX Recovery Trust has announced its fifth round of creditor distributions, totaling approximately $900 million, with payments set to begin on July 31. Eligible creditors in the convenience and non-convenience classes will receive funds through BitGo, Kraken, or Payoneer accounts within one to three business days. This marks another step in the ongoing effort to repay those affected by the collapse of the cryptocurrency exchange in November 2022.
FTX filed for Chapter 11 bankruptcy in November 2022 amid a severe crypto market downturn that saw multiple exchanges seek protection. Since then, the trust has distributed about $10 billion to creditors, including $2.2 billion in March. The latest distribution covers claimants with approved recovery plan entitlements, with convenience claims under $50,000 receiving 120% reimbursement and others receiving between 103% and 105% of their claim value.
The distribution comes as former FTX executives remain in federal prison. CEO Sam Bankman-Fried was sentenced to 25 years in 2024 after being found guilty of misusing customer funds, while Ryan Salame, co-CEO of FTX’s Bahamian affiliate, is also incarcerated. Bankman-Fried’s appeal was denied last month, and he has sought a presidential pardon from Donald Trump, though Trump indicated in a January interview he did not plan to grant one.
The US Senate unanimously adopted a resolution opposing clemency for Bankman-Fried, reflecting strong bipartisan opposition. While the measure cannot legally prevent a pardon, it underscores the political resistance to leniency for the convicted felon. This contrasts with criticism over Trump’s pardon of former Binance CEO Changpeng Zhao, which some lawmakers linked to a $2 billion investment from a UAE entity into the crypto exchange.
In related legal developments, law firm Fenwick & West agreed to pay $54 million in May to settle a class action lawsuit filed by former FTX users. The settlement came just days after a group of 20 users sued the firm for $525 million. Fenwick & West had advised FTX before its collapse, and the case highlights ongoing accountability efforts.
Looking ahead, the FTX Recovery Trust continues to process claims and make distributions, aiming to maximize recoveries for creditors. However, the totality of losses—including missed opportunities like the estate’s sale of a Cursor stake for $200,000 in 2023, now worth $3 billion—underscores the long road to full restitution. The outcome of Bankman-Fried’s pardon request remains uncertain, but the bipartisan opposition suggests significant hurdles.
