Creditors of bankrupt crypto exchange FTX will receive $1.6 billion at the end of this month as part of the third distribution in efforts to return client funds. This announcement was made by the FTX Recovery Trust last Friday.
Fund Distribution to Four Creditor Groups
According to the official statement, payments will be made on September 30, 2025 to four groups of creditors. The distribution value will range between 78% and 120% of their total holdings at FTX when the exchange collapsed in November 2022.
Funds will be distributed through partner platforms, namely Bitgo, Kraken, and Payoneer. This marks the third phase of FTX’s asset recovery plan, which has been ongoing since last year.
The Beginning of the FTX Crisis
FTX was once known as one of the largest crypto exchanges, allowing users to buy, sell, and speculate on the prices of major digital assets. However, the crisis unfolded due to the actions of eccentric CEO Sam Bankman-Fried (SBF) and his close team.
They were found to have misused customer funds to cover losses from risky trades made by FTX’s affiliated company, Alameda Research.
As a result, in 2022, FTX declared bankruptcy with billions of dollars in losses, leaving many investors without their assets.
FTX Recovery Trust and Recovery Efforts
Senior attorney John J. Ray III, who was appointed to oversee the recovery process, stated that the FTX case even surpassed the massive Enron bankruptcy of the early 2000s. To date, the total funds recovered by FTX for creditor repayment have reached over $5 billion.
Ray emphasized that although the process is long and complex, the main focus of the team is to ensure as much investor money as possible is recovered.
Punishment for Sam Bankman-Fried
Sam Bankman-Fried has been arrested, tried, and found guilty of large-scale fraud. He is now serving a 25-year prison sentence in Southern California.
Several key figures within FTX’s inner circle also provided damning testimonies, including:
- Gary Wang, FTX co-founder
- Caroline Ellison, former CEO of Alameda Research
- Nishad Singh, former head of engineering at FTX
Prosecutors described Bankman-Fried’s scheme as one of the largest financial frauds in U.S. history.