FTX Set to Begin Major Creditor Payouts in Late May

FTX is moving forward with its repayment plan, with distributions scheduled to begin on May 30, according to business restructuring lawyer Andrew Dietderich. Bloomberg reports that the exchange will use its $11.4 billion cash reserves—accumulated since its collapse—to compensate major creditors. These creditors include individuals and institutions that had millions in funds stored on the platform before its downfall.

While these larger payouts are set for late May, FTX’s “Convenience Class” creditors—those with smaller claims—began receiving distributions in February, according to a press release from the company.

Billions Set Aside for Customer Reimbursements

In October 2024, a U.S. bankruptcy court approved FTX’s plan to distribute between $14.7 billion and $16.5 billion to former customers. Under this plan, 98% of creditors will receive roughly 119% of their holdings’ value as of FTX’s bankruptcy filing in November 2022.

The ability to offer increased reimbursements stems from FTX’s financial recovery efforts, including rising crypto prices and the firm’s 8% stake in AI safety company Anthropic.

FTX filed for bankruptcy after its former CEO, Sam Bankman-Fried, allegedly misused customer funds. Reports indicate that billions in customer deposits were loaned to Alameda Research, the trading firm associated with FTX. The fallout led to a legal battle, with Bankman-Fried facing multiple charges related to fraud and financial mismanagement.

With the repayment process underway, the exchange’s former customers are now looking at the possibility of recovering their funds after nearly two years of uncertainty.