FTX set to dispense over $5 billion to creditors on May 30, announcing one of the largest single-day crypto bankruptcy payouts
Restitution of Over $5 Billion to Creditors by FTX Set for May 30
More than five billion smackeroos are set to be distributed to creditors on May 30 by the bankrupt crypto exchange FTX. This staggering sum marks one of the biggest single-day crypto bankruptcy settlements in history.
Eligible creditors must have had an "Allowed" claim status as of April 11, 2025, and completed KYC verification, submitted tax forms, and selected a distribution provider.
The upcoming payout will prioritize claims exceeding $50K. Latecomers who adhered to the compliance steps by the deadline will also be eligible for this distribution.
For those who chose Kraken or BitGo as their distribution service provider, expect your funds within a business day or three post-May 30. In November 2022, FTX previously disbursed around $800 million to smaller creditors with claims below $50K. A second round for this particular group is expected later this year, adding an additional $400 million to the pot.
The payout calculations are based on FTX's bankruptcy filing values in November 2022, rather than current crypto market prices.
Analysts believe this immense distribution could ignite an altcoin frenzy, with recovering creditors likely reinvesting their recovered funds into the market, aiming to make up for missed opportunities.
The FTX bankruptcy estate has racked up between $14.7 billion and $16.5 billion in assets. It anticipates that 98% of eligible creditors will recover at least 118% of their original claim value in cold, hard cash (cryptocurrency values at the time of FTX's downfall, not current market prices).
Creditors who miss the compliance deadline by June 1 risk forfeiting their claims, so make sure to verify your status on the official claims portal. This significant step towards settling the protracted bankruptcy case promises to rewrite trust in the crypto industry. The FTT token surged nearly 12% following the announcement.
Additionally, whispers of a Netflix docuseries revolving around the exchange's collapse and the life of Sam Bankman-Fried are circulating the rumor mill.
Insider Know-How
The $5 billion distribution will apply various recovery rates to different claim types, with creditors receiving recovery percentages ranging approximately from 54% to 120% of their original claims.
Following the payout announcement, Bitcoin and Solana experienced minor price drops of about 0.5% and 4%, respectively, indicating a touch of selling pressure or a cautious market stance related to this distro event.
Creditors receiving substantial payouts might swap assets or diversify portfolios, which could put downward pressure on specific coins in the short term. Smaller unsecured creditors and vendors offloading assets could also add to selling pressure, although to a lesser degree due to their smaller claim sizes.
Altcoin season enthusiasts might find solace in the possibility of recovered funds being reinvested into altcoins, potentially kick-starting or buoying an altcoin rally. On the flip side, an initial liquidation of recovered tokens, particularly those with FTX associations or low liquidity, could briefly dampen altcoin prices and postpone any potential altcoin boom. Post-distribution, a reallocation of funds towards altcoins may potentially inject fresh life into the altcoin market.
In essence, an immediate impact might reflect bearish or neutral vibes due to selling pressure, but medium-term effects could offer an opportunity for increased altcoin activity as the dust settles and recovered funds get re-circulated through the market.
- The upcoming crypto exchange's payout of over $5 billion to creditors could stimulate an altcoin frenzy, as recovering creditors might reinvest their recovered funds into various altcoins.
- The payout calculations are based on FTX's bankruptcy filing values in November 2022, not current crypto market prices.
- Eligible creditors who have completed KYC verification, submitted tax forms, and selected a distribution provider will be prioritized in the payout distribution.
- Depending on the recovery rates applied to different claim types, creditors may receive recovery percentages ranging from approximately 54% to 120% of their original claims.
