The long-awaited distribution of assets from the bankrupt FTX exchange is set to commence on May 30th, marking a crucial step in compensating those affected by its dramatic collapse. This process represents a major development following one of the cryptocurrency industry’s most significant downfalls.
In this initial phase of payouts, FTX plans to distribute over $5.4 billion. Eligible claimants are expected to receive their funds through designated processors, BitGo or Kraken, with transfers anticipated to be completed within a few business days following the commencement date. This funding comes from FTX’s substantial reported cash reserves, totaling $11.4 billion.
FTX Recovery Plan Details
This upcoming distribution is part of a broader, court-approved recovery strategy. Sanctioned by a U.S. bankruptcy court in late 2023, the plan aims to return between $14.7 billion and $16.5 billion to customers impacted by the platform’s failure in November 2022. While initial, smaller distributions began earlier in the year, this new wave specifically targets larger creditors, including individuals and institutions with substantial holdings.
Remarkably, the approved plan projects that approximately 98% of claimants will recover about 119% of the value they held at the time of FTX’s bankruptcy filing. This outcome, exceeding the value of assets when the company became insolvent, is largely attributable to two key factors: the significant recovery in cryptocurrency market prices since the collapse and the substantial increase in value of FTX’s investment in the artificial intelligence company, Anthropic.
The Collapse and Aftermath
FTX’s demise was triggered by allegations that its former CEO, Sam Bankman-Fried, had illicitly diverted billions in customer funds to the company’s affiliated trading firm, Alameda Research. Bankman-Fried has since faced legal proceedings and been convicted on multiple charges related to fraud.
FTX administrators have indicated that additional distributions are planned for the months ahead. These ongoing efforts are aimed at providing further clarity and resolution for creditors involved in one of the most prominent bankruptcy cases in cryptocurrency history.
Chris brings over six years of hands-on experience in cryptocurrency, bitcoin, business, and finance journalism. He’s known for clear, accurate reporting and insightful analysis that helps readers stay informed in fast-moving markets. When he’s off the clock, Chris enjoys researching emerging blockchain projects and mentoring new writers.