FTX to Pay $11.4B Creditor Payouts With 2022 Valuations

• The defunct crypto exchange FTX to repay $11.4 billion in cash to its creditors from May 30.
• Claims valued at November 2022 prices despite significant crypto appreciation.
• Recovery rate of 119% represents rare success in corporate bankruptcy proceedings.

FTX, the now-defunct exchange, will begin distributing $11.4 billion in cash to its major creditors starting May 30, 2025. The upcoming payments will use cryptocurrency valuations from November 11, 2022, which was the date of FTX’s collapse, despite substantial price appreciation since then.

The scheduled distribution follows earlier payments to smaller creditors, who began receiving funds in late 2024. This phased approach has prioritized individuals and entities with claims under $50,000. Reports also mentioned that 98% of minor creditors have been compensated within two months of the restructuring plan’s activation.

FTX’s bankruptcy journey has been notable for its asset recovery success. After filing for Chapter 11 protection in November 2022, the company has managed to reclaim between $14.7 billion and $16.5 billion in assets. This recovery rate has allowed a court-approved restructuring plan guaranteeing creditors 119% repayment. This is an outcome rarely seen in corporate failures of this magnitude.

CEO John J. Ray III, who previously managed Enron’s dissolution, has carried out an aggressive asset reclamation strategy. His team has divested stakes in various tech enterprises, property holdings, and cryptocurrency assets that benefited from Bitcoin’s market pump since 2022. The accumulated $11.4 billion treasury will fund the initial payouts.

The collapse of FTX was caused by founder Sam Bankman-Fried’s misappropriation of client funds to support his hedge fund Alameda Research. In March 2024, Bankman-Fried was convicted of fraud and sentenced to 25 years in prison. 

Despite the recovery, tensions remain regarding the form of repayment. Many creditors have advocated for settlements in cryptocurrency rather than cash. Since FTX’s collapse, Bitcoin has more than quadrupled in value.

Related: FTX Bankruptcy: The Costliest Crypto Collapse in History

U.S. Bankruptcy Judge John Dorsey has enforced cash reimbursements based on 2022 claim figures. However, legal experts suggest these efforts face challenging prospects given established bankruptcy procedures.

Adding financial pressure to the situation, interest payments continue to accrue. While FTX earns modest returns on its cash reserves, legitimate creditors are entitled to 9% annual interest on unpaid claims. The FTX bankruptcy now ranks among the most substantial insolvency distributions ever recorded in financial history. 

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