FTX to initiate next round of cash payouts after $1.9 billion cut in claims reserve

Bankrupt crypto exchange FTX has announced plans to begin its next round of cash payouts to creditors on or around September 30, 2025. The record date for eligible claimants is set for August 15, and those who qualify will receive payouts processed through FTX’s designated distribution partners, including BitGo, Kraken, and Payoneer.

This round will cover creditors in Class 5 Customer Entitlement Claims, Class 6 General Unsecured Claims, and Convenience Claims, which have been approved since the last distribution round.

Court-approved claims reserve reduction frees up cash for distributions

In an additional development, FTX received court approval to reduce its disputed claims reserve by $1.9 billion, from $6.5 billion to $4.3 billion. This adjustment will allow for more funds to be available for the next round of distributions to approved creditors.

The company emphasized that distributions will only be made to claimants who have completed KYC verification, submitted tax forms, and onboarded with one of the three distribution platforms. For those with transferred claims, the transfer must be fully processed and recorded on the official register by the August 15 record date.

FTX continues restructuring process

This marks another step forward in FTX’s restructuring process. Earlier this year, the company began repaying creditors after securing court approval for its redistribution plan, and to date, it has returned approximately $6.2 billion to creditors.

Once a dominant player in the crypto space, FTX collapsed in November 2022 following a liquidity crisis triggered by revelations about its balance sheet. This led to criminal charges against its founder, Sam Bankman-Fried, who was sentenced in 2023 to 25 years in prison for defrauding customers and investors of more than $11 billion. However, due to good behavior, he is now projected to be released on December 14, 2044, after serving less than 21 years of his sentence.

Chinese creditor challenges FTX’s global payout restrictions

A Chinese creditor, Weiwei Ji, who represents over 300 users, is opposing FTX’s proposal to restrict payouts in 49 jurisdictions, including China. Ji, who holds $15 million in verified claims, argues that the decision is legally unfounded and unfair. Ji’s objections suggest that Chinese users should not be penalized due to regulatory assumptions, especially with legal pathways available through Hong Kong.

FTX’s Recovery Trust has filed a motion to evaluate claims across 49 jurisdictions flagged as “potentially restricted”, including China, Russia, and Pakistan. Claims from these jurisdictions total roughly $800 million, with China accounting for approximately 82% of the total, according to figures cited by The Block.