FTX to Distribute Over $5 Billion in Second Creditor Payout on May 30

Digital Asset Repayment Plan Targets Over $5 Billion Distribution

FTX has reportedly announced plans to initiate its second creditor payout on May 30, aiming to distribute more than $5 billion to eligible claimants as part of the ongoing bankruptcy resolution process. The repayment initiative follows the initial round of disbursements that commenced in February, targeting creditors with claims under $50,000. 

The forthcoming distribution will encompass those with claims exceeding that threshold, with payments expected to be processed through BitGo or Kraken within one to three business days. The estate underscores that all distributions will be based on digital asset valuations as of the bankruptcy filing date, a factor that could result in considerably lower payouts than current crypto price index levels.

FTX CEO John Ray III, who has overseen the restructuring efforts since the platform’s collapse, previously disclosed that approximately $11.4 billion has been allocated for creditor repayments. Despite this substantial reserve, the valuation adjustments tied to the bankruptcy petition date could significantly impact the final amounts received by claimants. 

Payment rates will vary across different claim categories, with Dotcom Customer Entitlement Claims set to receive 72%, US Customer Entitlement Claims 54%, and General Unsecured Claims and Digital Asset Loan Claims 61% each. Convenience Claims, however, are slated for a notably higher repayment rate of 120%, highlighting the nuanced approach FTX is taking to address creditor claims.

FTX’s distribution plan requires creditors to complete a series of procedural steps, including logging into the FTX Customer Portal, undergoing Know Your Customer verification, submitting tax documentation, and selecting a Distribution Service Provider. Those opting to onboard with BitGo or Kraken will forfeit direct cash distributions from FTX, with payments instead routed through their designated provider. 

The estate’s latest update underscores the complexity of the payout process, emphasizing its focus on restoring creditor trust and transparency amid a sprawling network of claims stemming from one of the largest bankruptcies in crypto history.

This article has been refined and enhanced by ChatGPT.