Bankrupt cryptocurrency exchange FTX announced it will pay an additional $1.6 billion to creditors later this month.
The third distribution, under the Chapter 11 reorganization plan being handled by the company’s bankruptcy estate, will begin on September 30.
The new payments will cover both small investors and individual creditors, known as the “convenience class,” and larger, more complex claims, known as the “non-convenience class.” The convenience class consists of small investors, who make up approximately 99% of FTX’s creditor base.
FTX’s previous two rollouts allowed individual users to receive refunds of approximately 120% of their balances at the time of the exchange’s collapse in November 2022. However, some users are frustrated that these payments were made in cash, arguing they received lower returns because they received cash payments instead of crypto assets that are now undervalued.
Meanwhile, unsecured creditors have received a total repayment rate of 85% so far. This includes classes 6A General Unsecured Claims and 6B Digital Asset Credit Claims, which lent money to FTX and its sister company, Alameda Research. These groups are also expected to receive full repayment, according to the bankruptcy plan.
*This is not investment advice.