FTX Repayment: $900M Creditor Payout Set for July 31

Key Insights:

• The fifth FTX repayment will return another $900 million to creditors on July 31, 2026.
• Total announced repayments now exceed $10 billion, with some creditors recovering up to 120% of their claims.
• Preferred shareholders will receive an additional $18 million as FTX's bankruptcy wind down continues.

Nearly four years after its collapse, defunct crypto exchange FTX is preparing another major round of repayments. FTX will distribute roughly $900 million to eligible creditors on July 31, pushing its total announced recoveries beyond $10 billion. Here are the details about the FTX repayment.

FTX Repayment: Fifth Distribution Brings Another $900M for Creditors

FTX Trading Ltd. and the FTX Recovery Trust confirmed that the fifth distribution under the company's Chapter 11 reorganization plan will begin on July 31, 2026.

The latest payout covers creditors with approved claims in both the Convenience and Non-Convenience classes who completed all required pre-distribution steps before the June 16 record date.

Meanwhile, all eligible creditors are expected to receive their payments within one to three business days.

The recent round is expected to distribute approximately $900 million, taking FTX's cumulative announced repayments to more than $10 billion since distributions began earlier this year.

The company said future record and payment dates will be announced separately.

Some Creditors Recovered More Than Their Original Claims

The fifth payout continues the structure outlined in FTX's court-approved restructuring plan, with different creditor groups receiving different recovery percentages based on claim priority.

Under the latest distribution, Dotcom customers (Class 5A) will receive an extra 9%, taking their total recovery to 105%, while U.S. customers (Class 5B) will get another 5%, also reaching 105%.

Meanwhile, general unsecured creditors (Class 6A) and digital asset loan claim holders (Class 6B) will receive an additional 3%, bringing their total recovery to 103%.

At the same time, convenience claims (Class 7), which are typically smaller, remain the highest-paid group, with total recoveries reaching 120%.

The payouts include the original claim amount along with extra interest where allowed under the bankruptcy plan, helping several groups of creditors receive more than the value of their approved claims.

FTX’s Creditors Need to Complete Distribution Requirements

In an announcement, FTX said only creditors who completed all onboarding requirements before the June 16 record date will qualify for the July 31 payment.

To receive future distributions, creditors must verify their identity through Know Your Customer (KYC) checks, submit the required tax documentation, and complete onboarding with one of FTX's approved distribution providers, which are BitGo, Kraken, or Payoneer.

The company also reminded users that once they choose a distribution provider, all future payouts will be sent through that provider.

For transferred claims, payments will only be made after the ownership update is officially approved.

Preferred Shareholders Set to Receive Another Payment

Alongside creditor repayments, FTX confirmed a second payment for eligible preferred equity holders through the Preferred Shareholder Remission Fund Trust (PSRFT).

The trust will distribute $18 million on July 31 to preferred shareholders who met the June 16 eligibility requirements.

Once completed, total payments from the fund will increase to $95 million.

Eligible shareholders must submit ownership certifications, complete KYC verification, provide tax documentation, and onboard with BitGo or Payoneer, depending on whether they are institutional or individual investors.

Background of FTX Collapse

FTX filed for Chapter 11 bankruptcy in November 2022 after a severe liquidity crisis revealed an $8 billion shortfall in customer funds, making it one of the biggest failures in crypto history.

Since then, the bankruptcy team has recovered billions of dollars by selling company assets and investments. As a result, many creditors are expected to receive their full approved claim amount, along with extra interest.

However, the payouts are based on the U.S. dollar value of their crypto when FTX collapsed in 2022, not on today's much higher crypto prices, leaving many users unhappy.

Even so, the latest $900 million payout is another major step in completing one of the crypto industry's biggest bankruptcy cases.