FTX to distribute US$5 billion in next round of creditor payments

[NEW YORK] Advisers overseeing the bankruptcy of former cryptocurrency firm FTX are preparing to distribute another US$5 billion to company creditors, in what will be the second payment to customers this year.

FTX said this round of distributions will start on May 30 and that customers and other creditors of Sam Bankman-Fried’s fraud-tainted platform are slated to get between 54 per cent and 120 per cent of what they are owed in this payout. Customer payments are being made through Bitgo or Kraken, the company said.

An earlier round of customer payments was announced in February. The distributions are being made under a court-approved Chapter 11 payment plan, which was approved by a Delaware bankruptcy judge last year.

FTX customers will be fully repaid amounts they were owed when the firm filed for bankruptcy in November 2022. Although full repayment is a rarely achieved through Chapter 11, customers who held crypto on FTX are being repaid in cash and are missing out on the rise in digital-asset values that has occurred since the platform’s implosion.

Last June, the company had about US$12.6 billion, which could climb to as much as US$16.5 billion after FTX advisers have finished tracking down and selling the platform’s assets, according to court documents.

FTX announced in April that it had commenced legal action against token and coin issuers that owe the firm money. BLOOMBERG