FTX creditors to receive $11.4B cash repayments

FTX’s (CRYPTO:FTT) bankruptcy estate plans to begin cash repayments of $11.4 billion to primary creditors by May 30, 2025, using funds accumulated since its collapse in 2022.

The disbursements follow a Chapter 11 restructuring plan approved in October 2024, guaranteeing creditors 119% repayment—an uncommon outcome in corporate bankruptcies.

FTX, which filed for bankruptcy in November 2022 due to fraud and liquidity shortfalls, has recovered between $14.7 billion and $16.5 billion in assets, exceeding its $11.2 billion liabilities.

Smaller claimants owed under $50,000 started receiving payouts in late 2024, with larger creditors set to follow in May.

The exchange’s collapse was tied to founder Sam Bankman-Fried’s misallocation of client funds to Alameda Research, his hedge fund.

Bankman-Fried was sentenced to 25 years in prison in March 2024 and ordered to pay $11 billion in penalties.

CEO John J. Ray III, who previously led Enron’s bankruptcy, spearheaded asset recovery through divestments in technology stakes, real estate, and cryptocurrencies like Bitcoin, benefiting from its market resurgence.

While some creditors have sought repayments in cryptocurrency, citing Bitcoin’s (CRYPTO:BTC) gains since 2022, U.S. Bankruptcy Judge John Dorsey mandated cash reimbursements based on 2022 claim valuations.

Legal challenges over crypto-denominated settlements face limited prospects.

The resolution ranks among the largest insolvency distributions in history, with 98% of minor creditors receiving compensation within two months of the plan’s implementation.

The case has fueled calls for clearer cryptocurrency regulations, balancing investor protections with industry flexibility.

FTX’s repayment plan aims to restore market trust while highlighting risks tied to digital asset volatility and governance failures.

At the time of reporting, the FTX Token (FTT) price was $1.13.