Fifth FTX creditor payment distributes $900M to claimants
Since November 2022 when the cryptocurrency exchange declared bankruptcy and locked users out of their accounts, FTX and the FTX Recovery Trust have paid out approximately $10 billion.
On Friday, the trust responsible for compensating creditors connected to the collapsed FTX cryptocurrency exchange revealed that its upcoming round of fund distributions is scheduled to commence on July 31.
According to a Friday announcement, the cryptocurrency exchange and FTX Recovery Trust plan to allocate approximately $900 million to claimants falling within the "convenience and non-convenience classes" of the recovery plan. Those creditors who are eligible will be able to receive their funds via their Payoneer, Kraken or BitGo accounts, with transfers expected to process within one to three business days beginning July 31.
This upcoming distribution represents the fifth installment in the ongoing effort to reimburse FTX's creditors. Under FTX's recovery plan, convenience claims valued at less than $50,000 are set to receive reimbursement at 120%, whereas other claimants will receive distributions ranging from 103-105%.
After distributing $2.2 billion in March, the trust has successfully paid out approximately $10 billion since the company's bankruptcy filing in November 2022 during a cryptocurrency market decline that led numerous exchanges to seek Chapter 11 protection. Multiple former FTX executives, including Ryan Salame, the co-CEO of FTX's Bahamian affiliate, and CEO Sam "SBF" Bankman-Fried, remain incarcerated in federal prison due to their involvement in the exchange's misappropriation of customer funds.
Fenwick & West, the law firm that provided advisory services to FTX prior to its downfall, reached an agreement in May to pay $54 million for settling a class action lawsuit brought by former users. The settlement came just days after a group of 20 FTX users initiated legal action against the law firm seeking $525 million in damages.
Presidential pardon looking less likely for former FTX CEO
After entering a not guilty plea to criminal charges concerning his involvement in the misappropriation of customer funds at FTX, Bankman-Fried was ultimately convicted and received a 25-year prison sentence in 2024. A federal court rejected his appeal for both his conviction and sentence last month, upholding the New York court's original ruling.
Nevertheless, even prior to the public release of the appellate court's decision, Bankman-Fried submitted a pardon application to Donald Trump, which the US president indicated during a January interview he had no intention of granting. Notwithstanding Trump's statement, the US Senate this week unanimously passed a resolution expressing opposition to any clemency for the former FTX CEO.
While the measure lacks the authority to prevent Trump from issuing a pardon, it demonstrated bipartisan opposition to the president granting clemency to an individual with a felony conviction. Numerous lawmakers have voiced criticism of the president for pardoning former Binance CEO Changpeng Zhao following a $2 billion investment by a UAE entity into the crypto exchange using a stablecoin issued by World Liberty Financial, the Trump family business.