Struggling Crypto Platform FTX to Disburse $5.4 Billion to Creditors by Month's End
Scams, Hacks & Breaches: FTX to Pay Out Nearly $5.5 Billion to Creditors
After filing for bankruptcy last year, FTX, the fallen crypto exchange, is gearing up to distribute a staggering $5.4 billion to its creditors from its $11.4 billion cash reserves. The payouts are scheduled to begin on May 30th via Bitgo or Kraken and will be completed in 1-3 business days [Press Release].
FTX's main creditors, consisting of institutional and individual investors with significant funds on the platform, will receive their funds first. Smaller creditors, categorized as Convenience Class, started receiving distributions in February. In total, FTX aims to pay out between $14.7 billion and $16.5 billion to its former customers [US Bankruptcy Court].
The increased payouts can be attributed to the rising crypto prices and FTX's 8% stake in Anthropic, an AI safety and research company [The Daily Hodl]. However, the exchange's implosion in 2022 amid allegations of mishandled funds was a blow to the industry. The controversy surfaced when Sam Bankman-Fried, FTX's former CEO, was accused of loaning billions of dollars of customer deposits to Alameda Research, the firm's trading arm [The Daily Hodl].
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October 2022 saw a US bankruptcy court approving FTX's plan to distribute payouts worth up to $16.5 billion to its customers. As per the plan, 98% of the exchange's creditors are expected to receive approximately 119% of the value of their holdings at the time of FTX's bankruptcy filing in November 2022. The increased returns come from the soaring crypto market and FTX's stake in Anthropic [The Daily Hodl].
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[1] The Daily Hodl: "FTX Filing Reveals Former Clients Stand to Get $16.5 Billion in Payouts" (May 16, 2025)
[2] The Daily Hodl: "FTX Customers Approved for 98% Recovery in Bankruptcy Plan, Distributions to Start in May" (October 18, 2022)
[3] The Daily Hodl: "FTX Implosion: FBI Seizes Data from Bankman-Fried's Parents' Homes, Sam Bankman-Fried Suspects Inside Job at Exchange" (January 10, 2023)
[4] The Daily Hodl: "FTX and Binance CFOs Join Chainalysis Board as Crypto Giants Deepen Relationships" (April 19, 2023)
Contemplating future distributions, FTX plans to allocate a substantial portion of its cryptocurrency reserves towards paying out altcoins to its diverse set of creditors, all in an effort to uphold the transparency and integrity of blockchain-based finance. As financial pioneers strive for accountability and trust within the cryptocurrency sphere, the ramifications of this move may pave the way for a more secure landscape for all parties involved.
