Collapsed crypto exchange distributes funds to creditors with varying recovery rates
The bankrupt cryptocurrency exchange, operating under court-approved reorganization plans, expects eligible creditors to receive funds from distribution partners BitGo or Kraken within 1 to 3 business days of the May 30 announcement.
Recovery rates vary significantly across different creditor classes. Allowed Class 7 Convenience Claims Convenience claims holders are receiving 120% distributions, while other customer groups see recovery rates between 54% and 72%. Specifically, FTX.com customer claims receive 72% payouts, U.S. customer claims get 54%, and general unsecured claims along with digital asset loan claims each receive 61% distributions.
The substantial payouts mark a remarkable turnaround for what was initially expected to be a total loss scenario when FTX collapsed in November 2022 amid fraud allegations against founder Sam Bankman-Fried and other senior staff. Bankman-Fried was ultimately convicted and is currently serving a 25 year prison term.
To qualify for future distributions, customers must complete several requirements including logging into the FTX Customer Portal, completing know-your-customer verification, submitting required tax forms, and onboarding with either BitGo or Kraken as distribution service providers.
The estate continues warning users about phishing attempts, emphasizing that FTX will never ask customers to connect their wallets and directing them only to the official claims portal at claims.ftx.com.
This second distribution follows an earlier payout round, with additional distribution dates to be announced as the estate continues recovering assets. The recovery has been aided by the broader cryptocurrency market rally, which increased the value of digital assets held by the estate.
Source: https://bravenewcoin.com/insights/ftx-begins-second-round-of-customer-payouts-worth-over-5-billion