FTX is preparing to initiate a fresh $1.9 billion round of creditor payments starting September 30, following a significant reduction in disputed claims. This development clears the way for funds to be released to verified creditors of the collapsed crypto exchange.
In an update shared Wednesday, both FTX Trading and the FTX Recovery Trust confirmed the timeline, stating that payouts will be based on a snapshot of claim holders as of August 15.
This will be the third major payout since the bankruptcy process began. The estate previously distributed $1.2 billion in February and another $5 billion in May.
The green light for this round comes after a bankruptcy court allowed the estate to reduce the disputed claims reserve from $6.5 billion to $4.3 billion — freeing up $1.9 billion in liquid assets for repayment to approved creditors.
$4.3B Still Contested — China Creditors Unlikely Included
Despite the progress, roughly $4.3 billion in claims remain unresolved. According to creditor advocate Sunil Kavuri, the upcoming payout is unlikely to include creditors based in China or other jurisdictions listed in a pending motion regarding restricted territories.
“These claims are still not approved and probably won’t be by the August 15 deadline,” Kavuri said, adding that the motion defining the treatment of restricted jurisdictions is currently undergoing revisions.
He also noted that some recipients in the next round may be creditors with larger claims (over $50,000) who already received partial payouts.
No Final Decision Yet on Jurisdiction Restrictions
A court hearing earlier this week was expected to address whether payments to users in 49 jurisdictions should be frozen due to regulatory complications. However, no ruling was made on that matter.
Instead, the judge approved FTX’s request for more time to revise its proposal, after receiving over 90 formal objections from impacted creditors.
As creditor Weiwei Ji explained, the court instructed the FTX estate to submit a clearer and more practical framework — specifically noting that they cannot confiscate funds from creditors:
“There needs to be a transparent and functional way for people to reclassify their status from restricted to unrestricted jurisdictions,” Ji said.
The revised motion is expected to address how FTX will handle these complex legal restrictions moving forward, potentially impacting future payouts.
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