FTX creditors to get up to 120% in $900m payout
FTX's wind-down estate will distribute $900 million to creditors, delivering rare above-par returns that highlight the value of early asset liquidation but leave some investors missing out on crypto's subsequent rally.
The FTX Recovery Trust will distribute approximately $900 million to creditors on July 31, marking the fifth payout since 2025. Most creditors will receive more than their original claims, with the smallest accounts recovering up to 120%. Funds should arrive within one to three business days.
International customers will receive 105% of their claims after a 9% boost, closing a previous gap with US customers, who also reach 105% after a 5% increase. Other creditor groups will recover 103%. Earning more than 100% remains exceptionally rare in bankruptcy cases, where collapsed crypto exchanges typically return only a fraction of owed funds.
The excess returns come from a 9% annual interest rate applied to claims starting from the exchange's November 2022 collapse under founder Sam Bankman-Fried. Sunil Kavuri, a vocal creditor activist who lost roughly $2.1 million in the collapse, has closely tracked the process. The wind-down, led by restructuring expert John Ray III, has successfully gathered over $14 billion by liquidating assets.
That aggressive liquidation strategy carries a significant caveat for market professionals to note. Bankruptcy claims are valued strictly at 2022 cryptocurrency prices. Because digital asset values have surged significantly since the collapse, creditors accepting cash payouts are effectively forfeiting substantial market upside. The estate's early sale of its stake in AI firm Anthropic for roughly $1.3 billion perfectly illustrates this dynamic, as those shares would be worth considerably more today.
In another highly unusual development for a failed company, preferred shareholders are also receiving funds. They are scheduled to get an additional $18 million on July 31, bringing their total recovery to $95 million. Equity holders almost never recover capital in bankruptcy proceedings. Prior to this upcoming distribution, four earlier rounds had already returned roughly $10 billion to creditors, including a $2.2 billion tranche in March.
The trust has not yet established a timeline or size for a sixth payout. However, investors who purchased claims on secondary FTX claims markets must wait 21 days to qualify for future distributions. The estate continues to warn creditors of ongoing scam attempts, explicitly noting it will never ask users to connect a digital wallet.
