FTX Recovery Trust Initiates Fifth Distribution Round, Releasing $900 Million to Former Users
Key Takeaways
- •The FTX Recovery Trust distributed approximately $900 million to former users in its fifth repayment round, bringing total estimated payouts to roughly $11 billion.
- •Creditor claims are calculated using cryptocurrency prices as of November 11, 2022, when major crypto assets were trading near multi-year lows, rather than at current higher market values.
- •Former CEO Sam Bankman-Fried and FTX Digital Markets co-CEO Ryan Salame remained in federal prison as of July, while former Alameda Research CEO Caroline Ellison was released in January.
- •A bankruptcy judge permitted the FTX trust to proceed with its core $1.76 billion clawback claim against Binance but ruled the trust cannot pursue damages against the exchange or its former CEO Changpeng Zhao.
- •Distribution partners Kraken, BitGo, and Payoneer are facilitating the court-approved repayments to affected creditors who have been unable to access their funds for years.
The FTX Recovery Trust has launched its fifth round of creditor distributions, disbursing approximately $900 million to former users of the collapsed cryptocurrency exchange.
According to a Friday post on X, former FTX user Sunil Kavuri confirmed receiving funds through Kraken, one of several distribution partners alongside BitGo and Payoneer. Kavuri stated he had received notice the previous week that FTX had transferred the funds to Kraken, which released them on schedule Friday as part of the court-approved distribution plan.
Under the approved reorganization plan, creditor claims are valued based on cryptocurrency prices as of November 11, 2022 — the date FTX filed for Chapter 11 bankruptcy — rather than current market values. This methodology means creditors receive fiat-denominated payouts reflecting 2022 asset prices, which for major cryptocurrencies were near multi-year lows at the time and substantially below current levels.
This marks the fifth repayment round since FTX filed for bankruptcy in 2022. With this latest distribution, the trust is estimated to have paid out roughly $11 billion in total to affected creditors who have been unable to access their funds for years.
FTX was among the largest and most prominent crypto exchanges to collapse during the 2022 market downturn. The collapse led to criminal charges against multiple executives over the misuse of customer funds.
As of July, former CEO Sam "SBF" Bankman-Fried and Ryan Salame, co-CEO of FTX's Bahamian affiliate FTX Digital Markets, remained in federal prison. Former Alameda Research CEO Caroline Ellison was released in January after serving more than a year of her sentence.
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Binance and Former CEO Face $1.76 Billion Clawback Claim from FTX Trust
In a separate legal development, a bankruptcy court judge ruled last week that the FTX trust cannot pursue damages against crypto exchange Binance and its former CEO Changpeng Zhao. However, Chief Judge Karen B. Owens declined to dismiss the trust's core claim seeking to claw back $1.76 billion from Binance.
The funds in question were used to repurchase Binance's stake in FTX, which the trust alleges was financed in part by what it described as "Bankman-Fried's pervasive and now well-known malfeasance."
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