FTX, a crashing cryptocurrency exchange, will allocate more than $5 billion to creditors starting May 30, 2025 as part of its Chapter 11 bankruptcy plan. The second phase of repayment is after $1.2 billion of initial distribution, aiming to return funds to users affected by the exchange’s 2022 collapse, with some creditors receiving 120% of their claims.
(1/3) FTX today announced that it will allocate more than $5 billion to holders for convenient and non-smart courses, with claims that have been completed on May 30, 2025 before distribution requirements.
-FTX (@ftx_official) May 15, 2025
Major milestones for FTX recovery program
FTX, once the leading cryptocurrency exchange, will begin a second wave of creditor repayments on May 30, 2025, allocating more than $5 billion in recovered funds. This follows the first phase in February 2025, which paid $1.2 billion to creditors with claims less than $50,000. The FTX Recovery Trust, led by Program Administrator John J. Ray III, describes it as an “unprecedented distribution process” due to the size and complexity of the creditor base.
As of November 2022, when FTX filed for bankruptcy, the bankruptcy estate had been recovered between $14.7 billion and $16.5 billion, enough to repay 118% of the value of 98% of the creditors’ claims.
Crypto platforms Bitgo and Kraken will facilitate repayments, with funds expected to reach qualified creditors within one to three working days. The four creditor groups will receive distributions, and when FTX goes out of business, spending ranges from 54% to 120% of the value of its holdings.
Source: PR Newswire
For example, Tier 5 creditors, including lenders and trading partners of Alameda Research, will receive 54% to 72% of creditors, while creditors with inter-company claims will receive up to 120% of creditors.
Creditors reinvest signals encryption market confidence
From NFT at night Indicates this Nearly 80% FTX creditors who receive repayments in the first phase have Reinvest its funds into cryptocurrenciesespecially Bitcoin and altcoins like Solana. This reinvestment trend observed as of April 2025 shows that although the FTX crash triggered a cryptocurrency winter, there is strong confidence in the recovery of the cryptocurrency market, which has brought the price of Bitcoin to $16,000 in November 2022.
Source: NFT Night
By May 2025, Bitcoin BTC The deal was around $104,000, highlighting the significant market rebound creditors missed due to 2022 valuation-calculated repayments.
However, not all creditors are satisfied. Based on the crypto price in November 2022, the “dollarization” process allocates the value of the claim, sparking debate. For example, when FTX collapsed, Bitcoin was worth $20,000, meaning that the Fiat equivalent factor obtained by creditors is much lower than the current market value. Solana solThe price of major shares in the FTX portfolio is $17 in 2022, but is now trading close to $170, expanding losses to some creditors.
Challenges and prospects for the future
The repayment process has faced obstacles, including on June 1, 2025, with a deadline of nearly 400,000 creditors to understand your customer (KYC) verification. About 392,000 users could lose $2.55 billion in claims due to KYC incomplete KYC, although the deadline was extended from March 3 to provide relief. The technical issues with the KYC portal also frustrated users, which prompted the guidance of the FTX support team to reapply through email and support portals.
Read more: What is KYC in Crypto and why does exchange require KYC?
The $5 billion distribution could inject liquidity into the cryptocurrency market, which could increase the prices of Bitcoin and Altcoin. However, analysts remain cautious, pointing out that trust issues and market dynamics may ease bullish expectations.
