FTX is set to begin its second creditor payout starting on May 30, targeting to distribute more than $5 billion to eligible claimants, according to the estate’s Thursday announcement. Payments will be processed through BitGo or Kraken and are expected to arrive within 1 to 3 business days, the entity states.
The upcoming round is part of FTX’s ongoing bankruptcy resolution and follows the initial payouts that began in February for creditors with claims under $50,000. The second distribution will focus on repaying creditors with claims exceeding that amount.
According to Bloomberg’s March report, FTX, under the leadership of CEO John Ray III, has approximately $11.4 billion earmarked for creditor repayments. However, payouts will be based on digital asset values as of the bankruptcy petition date.
In other words, creditors will receive amounts tied to much lower valuations at the time of FTX’s collapse.
The distribution includes varying payment rates across different claim categories: Dotcom Customer Entitlement Claims will receive 72%, US Customer Entitlement Claims 54%, General Unsecured Claims and Digital Asset Loan Claims 61% each, and Convenience Claims 120%.
“These first non-convenience class distributions are an important milestone for FTX,” said FTX CEO. “The scope and magnitude of the FTX creditor base make this an unprecedented distribution process, and today’s announcement reflects the outstanding success of the recovery and coordination efforts of our team of professionals.”
To receive distributions, creditors must complete several requirements, including logging into the FTX Customer Portal, completing Know Your Customer verification, submitting tax forms, and onboarding with either BitGo or Kraken.
Customers who onboard with a Distribution Service Provider will forfeit their right to receive cash distributions directly from FTX, with payments instead going through their chosen provider.
