FTX creditors have until 16 Jun to ensure their claims are eligible for the bankrupt exchange's next distribution, with repayments expected to begin on 31 Jul as the estate moves closer to another round of customer recoveries more than three years after its collapse.
The next distribution will be made through BitGo, Kraken and Payoneer. The deadline serves as the record date for holders of allowed claims and interests seeking to participate in the upcoming payout. Creditors must have completed required pre-distribution steps, including Know Your Customer verification, tax documentation and onboarding with one of FTX's distribution providers.
Reserve reduction
The FTX Recovery Trust, which oversees the exchange's bankruptcy proceedings and creditor repayments, filed an amended notice with the US Bankruptcy Court on 26 May seeking to reduce its disputed claims reserve by $600mn, from $2.4bn to $1.8bn.
If approved, the move would release additional cash for distribution to holders of allowed claims.
The disputed claims reserve was established to ensure sufficient funds remained available while contested claims were reviewed. Reducing the reserve suggests the estate is becoming more confident about the amount required to cover unresolved claims.
FTX did not disclose the size of the upcoming distribution.
Recovery process
The next repayment round marks another step in the unwinding of one of the largest failures in crypto history.
FTX filed for bankruptcy in November 2022 after a run on customer deposits exposed an estimated $8bn hole in its balance sheet. Founder Sam Bankman-Fried was convicted of fraud and conspiracy in 2023 and later sentenced to 25 years in prison.
Under the exchange's restructuring plan, most customer claims are being repaid based on the value of assets at the time of the bankruptcy filing rather than in cryptocurrency. The estate has previously estimated total recoveries of between $14.7bn and $16.5bn.
That approach remains controversial among some former customers. Bitcoin (BTC) claims, for example, were valued using petition-date prices from November 2022, when the cryptocurrency traded near $16,871. Bitcoin traded at $67,000 on 15 Jun, roughly four times the valuation used in the bankruptcy process.
Tech winners
The latest distribution comes days after SpaceX's public listing, which has renewed attention on one of the venture investments linked to the FTX estate.
FTX and its affiliated trading firm Alameda Research invested about $700mn through vehicles associated with venture capital firm K5 Global before the exchange's collapse. According to creditor representative Sunil Kavuri, roughly $190mn of that capital was invested in SpaceX at a valuation of about $125bn. SpaceX debuted on Nasdaq on 12 Jun at a valuation of approximately $1.8tn, implying the holding could now be worth about $2.7bn, assuming the stake has not been materially diluted.
The recovery effort has also been aided by FTX's investment in artificial intelligence company Anthropic. FTX generated about $1.3bn from the sale of its Anthropic stake after investing $500mn in the startup in 2021.
