FTX Will Hand Out Over $5 Billion in Bankruptcy Repayments This Month

In brief FTX creditors will receive more than $5 billion from the FTX bankruptcy estate, beginning May 30. Creditors will receive between 54% and 120% of their claims in the second phase of the FTX bankruptcy plan. The estate has already begun processing claims distributions for more than 90% of creditors. FTX creditors will receive more than $5 billion from the bankrupt crypto exchange’s estate as the next wave of distributions takes place on May 30, the FTX Recovery Trust said Thursday in a statement. Four groups of creditors will receive the funds, with distributions ranging between 54% and 102% of the value of their FTX holdings when the exchange collapsed in November 2022. The distributions mark the second phase of the FTX bankruptcy estate’s recovery plan. “These first non-convenience class distributions are an important milestone for FTX,” FTX Recovery Trust plan administrator John J. Ray III said Thursday in the statement. “The scope and magnitude of the FTX creditor base makes this an unprecedented distribution process.” Under the recovery plan, members of creditors Class 5—a group that includes lenders and trading partners of Alameda Research and other traders and vendors—will receive distributions between 54% and 72% of their claims. Another group of FTX victims with small, unsecured claims can expect disbursements of 61%, while claims involving inter-company interests will be paid out at 120%. BitGo and Kraken will send the funds to eligible creditors within one to three business days from May 30. The second wave of claims distributions comes amid signs that FTX’s multi-billion-dollar collapse has faded in the public consciousness, amid the United States government’s pro-crypto pivot under President Donald Trump. Since the recovery process nearly three years ago, U.S. regulators have approved the trading of spot Ethereum and Bitcoin ETFs, while state and federal governments and public companies have put forth proposals to establish reserves based on various digital assets. Furthermore, the SEC under Trump has ended most of its cases against—and investigations into—crypto firms. The result is a dramatic overhaul of the crypto industry’s shadowy image that has culminated in surging asset prices and demand for crypto exchange-traded products. The FTX Recovery Trust first announced it would execute its distribution plan late last year. Under the plan’s initial phase, which kicked off in February, creditors with claims worth $50,000 or less received more than $1 billion combined in payouts from the bankruptcy estate. The next phase of the plan will issue payouts to some of the less than 10% of FTX creditors that haven’t yet received distributions from the bankruptcy estate. Edited by Andrew Hayward Daily Debrief Newsletter Start every day with the top news stories right now, plus original features, a podcast, videos and more. Source: https://decrypt.co/320340/ftx-hand-out-over-5-billion-repayments