FTX announces $5b second distribution to eligible creditors

FTX plans to commence a $5 billion second distribution to eligible creditors on May 30, 2025.

FTX Trading Ltd. and the FTX Recovery Trust announced the upcoming distribution via a press release on May 15. The $5 billion set for distribution will go to holders of allowed claims under the collapsed crypto exchange’s Chapter 11 reorganization plan.

This second tranche of distributions will cover eligible creditors in both the Convenience and Non-Convenience Classes. However, disbursement is limited to FTX creditors who have completed the required pre-distribution processes.

Eligible creditors will receive funds from their distribution provider – either Bitgo or Kraken – within one to three business days starting May 30, 2025. After this phase of the Chapter 11 plan, FTX will issue an update on subsequent record and payment dates.

The announcement of this second distribution follows the initial phase in February 2025, with the record date for the next distribution having been scheduled for April 11, 2025. It included a record for allowed claims with Class 5 customer entitlement claims and Class 6 general unsecured claims. 

Also covered were holders of convenience claims that had been allowed but not yet received. FTX aimed for the second distribution on the date it just announced.

John J. Ray III, plan administrator of the FTX Recovery Trust, noted in a statement: 

“These first non-convenience class distributions are an important milestone for FTX. 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. Our focus remains on recovering more for creditors and resolving outstanding claims.”

The distribution will see creditors in allowed class 5A Dotcom Customer Entitlement Claims receive a 72% of funds, class 5B U.S. Customer Entitlement Claims 54% and classes 6A General Unsecured Claims and 6B Digital Asset Loan Claims 61% distribution. Meanwhile, those in allowed class 7 Convenience Claims are expected to get 120%.

FTX collapsed in November 2022, imploding amid fraud by convicted company officials, including founder and former chief executive officer Sam Bankman-Fried.

Amid the announcement, the FTX Token (FTT) spiked more than 13%, trading to highs of $1.33. When FTX imploded, FTT price nosedived from highs of $25 to $0.87 within days.