FTX to Repay $1.6 Billion to Creditors as Bankruptcy Case Advances

Mohammedia – FTX, the collapsed cryptocurrency exchange, will begin distributing $1.6 billion to creditors on September 30, 2025, as part of its ongoing U.S. bankruptcy process.

Repayment plan begins

FTX’s recovery estate confirmed that the new $1.6 billion distribution will only reach creditors who completed identity verification through the company’s claims portal.

The payments, overseen by the court-appointed recovery team, will be processed through providers such as BitGo, Kraken, and Payoneer.

The estate stressed that unverified claimants will not be included in this round, a safeguard meant to reduce fraud and disputes.

This third distribution follows two earlier rounds of repayments, which together returned more than $6 billion to creditors. The combined repayments now place FTX among the largest bankruptcy recoveries in the crypto sector.

Creditors are divided into categories with different recovery rates. U.S. customers are set to receive 40% in this round, bringing their overall recovery close to 95%.

International customers on FTX’s main platform, referred to as “dotcom” customers, will receive an additional 6%, raising their total recovery to around 78%.

General unsecured creditors and digital asset loan claimants will receive about 24%, pushing their cumulative recovery to 85%.

Convenience claims, which cover smaller balances, will be paid up to 120% of their face value, giving some of the smallest claimants a full recovery plus extra.

Collapse and bankruptcy

FTX, once one of the largest global cryptocurrency exchanges, collapsed in November 2022 after facing a liquidity crisis that revealed billions of dollars in customer deposits had been misused.

The exchange quickly filed for Chapter 11 bankruptcy in the United States, triggering a complex legal process to identify assets and distribute them among creditors.

The crisis was closely linked to Alameda Research, a trading firm founded by former FTX chief executive Sam Bankman-Fried.

Investigations found that customer deposits were improperly diverted to cover trading losses and risky bets, leaving the exchange unable to meet withdrawal requests. The collapse erased billions in customer wealth and sparked widespread distrust in cryptocurrency platforms.

In 2023, Bankman-Fried was convicted of fraud and conspiracy charges and sentenced to prison.

A recovery team led by new management has since been working under court supervision to reclaim assets, unwind corporate holdings, and return value to customers. The bankruptcy case remains one of the most closely watched in the digital asset industry.

Challenges and recovery efforts

The repayment process has faced challenges over how claims should be valued. Under U.S. bankruptcy rules, claims are set at the asset prices in November 2022, when FTX filed for bankruptcy.

Because cryptocurrency prices were far lower then, compared to 2025 levels, many creditors argue they are being repaid less than the true current value of their holdings. Despite these disputes, courts have upheld the approach as consistent with bankruptcy law.

To maximize repayments, the recovery estate has liquidated various assets, including investments in technology companies, and has pursued lawsuits to reclaim funds transferred before the collapse.

Settlements with third parties tied to FTX and Alameda Research have also been added to the pool available for distribution. These efforts have enabled a level of creditor recovery that is unusually high compared to most large bankruptcy cases.

With the upcoming $1.6 billion distribution, total repayments to FTX creditors will surpass $7 billion.

While some customers may still feel shortchanged by the valuation rules, the scale of the recovery shows that significant progress has been made in addressing one of the largest financial failures in the crypto industry.

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