FTX to Return $5 Billion to Creditors—Here’s What You Need to Know

• FTX’s Recovery Trust has announced plans to distribute more than $5 billion to creditors, with funds expected to be processed within 1 to 3 business days beginning May 30.
• This marks the second phase of the company’s repayment strategy, following an initial phase that started in February 2025.

In November 2022, FTX, once the world’s second-largest crypto exchange, shocked the crypto market when it filed for bankruptcy. The implosion was gigantic, revealing that over $8 billion of customers’ funds had vanished through mismanagement and commingling of funds between FTX and its sister company, Alameda Research.

John J. Ray III, a restructuring expert known for managing the Enron bankruptcy, took over as CEO to steer the company through the ensuing chaos.  On May 15, the FTX Recovery Trust announced that the second phase of recoveries for creditors will begin on May 30. The phase will see over $5 billion disbursed to eligible claimants under the approved Chapter 11 Plan of Reorganization. A flow of liquidity into the wallets of crypto consumers should, in theory, have a real impact on the altcoin market, and this could result in greater buying pressure.

Who Will Receive These Funds?

This second payment phase involves creditors with claims that fall in the Class 5 (Customer Entitlement Claims) or Class 6 (General Unsecured Claims) category. Both convenience and non-convenience claimants are eligible as long as they have satisfied all pre-distribution requirements. Payments will be done securely by third-party platforms like BitGo and Kraken that are approved.

John J. Ray III emphasized how significant this milestone is:

These first non-convenience class distributions mark an important step forward for FTX. Given the size and complexity of the creditor base, this is an unprecedented process. Our team’s efforts in recovery and coordination have been exceptional. We’re focused on recovering as much as possible and resolving outstanding claims.

The current payment structure allocates 61% of the payable amount to General Unsecured Claims and Digital Asset Loan Claims, while Convenience Claims will receive a generous 120% refund. In addition, all outstanding claims will continue to receive 9% yearly interest until complete payment is made. For customer rights, Class 5A Dotcom customers are entitled to receive 72% of their claims, while US-based Class 5B customers will receive 54%.

According to FTX, creditors may receive up to 118% of their claim value in cash, but this is based on November 2022 asset valuations, when FTX filed for bankruptcy. Others have complained that this approach does not reflect actual creditor losses, especially those who hold cryptocurrency that has increased in value by leaps and bounds since FTX’s collapse.

Earlier in February 2025, FTX initiated its initial round of payments to creditors, and it focused on people with minor claims. Creditors who had claims not exceeding $50,000 each got an overall payment of over $1 billion from the bankruptcy estate. In total, that first phase paid out approximately $1.2 billion, predominantly to small individual claimants, for more than 90% of all the claims.

Additional distributions may occur depending on future asset recoveries.  Notably, for transferred claims, payouts will only be made to the transferee officially listed on the claims register maintained by the Notice and Claims Agent, and only after a 21-day notice period has passed without any objections.