Bankrupt Crypto Exchange FTX Officially Kicks Off Second Round of Creditor Repayments With $5,400,000,000 Distribution
The bankrupt crypto exchange FTX has begun distributing more than $5.4 billion to creditors.
The payouts represent the exchange’s second round of distributions after smaller creditors categorized in FTX’s “Convenience Class” started receiving repayments in February.
Creditors in this round include “convenience class” members and larger claims. They will all receive funds via BitGo or Kraken within one to three business days from Friday, per a new press release.
FTX will make payouts from its $11.4 billion cash reserves, and the exchange says subsequent distributions will be announced “in due course.”
In October, a US bankruptcy court greenlit FTX’s plan to distribute between $14.7 billion and $16.5 billion worth of payouts to the crypto exchange’s former customers.
The plan calls for 98% of the exchange’s creditors to receive approximately 119% of the value of their holdings on the day FTX filed for bankruptcy in November 2022.
The increased payouts are thanks to crypto prices and FTX’s 8% stake in the AI (artificial intelligence) safety and research company Anthropic.
FTX imploded and filed for bankruptcy amid accusations that its then-chief executive, Sam Bankman-Fried, mishandled the exchange’s funds by loaning out billions of dollars worth of customer deposits to Alameda Research, the firm’s trading arm.
A US judge sentenced Bankman-Fried to 25 years in prison last year after he was convicted of fraud charges in 2023.
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