- FTX Recovery Trust schedules a $2.2 billion distribution on March 31 as the fourth payout to eligible creditor classes
- Recovery rates reach up to 100% for several claim categories, while preferred equity holders face an April 30 record date for May 29 payments
The estate of collapsed crypto exchange FTX plans to distribute approximately $2.2 billion to creditors on March 31, according to a statement from FTX Recovery Trust. The upcoming payment forms part of the ongoing Chapter 11 bankruptcy process and follows several prior rounds aimed at returning assets to users and investors affected by the firm’s failure in November 2022.
Fourth distribution under FTX Chapter 11 plan
This latest payment is the fourth major distribution under the FTX reorganization plan and will be directed to creditors in both “Convenience” and “Non-Convenience” classes, provided they have completed all required onboarding procedures. The trust said funds are expected to reach recipients within 1 to 3 business days after the March 31 date, depending on the chosen service provider.
All payments will be made in U.S. dollars and sent to designated platforms, including BitGo, Kraken, and Payoneer. These service providers will then allow recipients either to withdraw in fiat or, where offered, convert into digital assets. Creditors who selected a designated provider have given up the option to receive direct cash payments from the estate and must access their distributions through those platforms.
The March 31 transfer follows a prior distribution that began on Sept. 30, when about $1.6 billion was released to creditors. Taken together with earlier rounds, total distributions have exceeded $6 billion, the trust said, reflecting ongoing efforts to recover and return assets to users of the exchange.
Rising recovery rates across creditor classes
The trust reported that the fourth distribution will further improve recovery percentages across several claim categories. For creditors in the “Class 5A Dotcom” group, the new payment adds 18% to their previous recovery, taking the total to 96%. U.S. customer claims categorized as “5B” are expected to reach full recovery at 100% once this round is complete.
Creditors in “Class 6A” and “6B” are also projected to reach 100% recovery, each receiving an additional 15% in this distribution. The statement noted that “Class 7” claimants are positioned for a cumulative 120% distribution, implying amounts above the face value of their recognized claims.
These rising recovery levels mark a significant development in a case that has been central to the broader fallout from the FTX collapse. The exchange’s failure in November 2022 contributed to a sharp downturn in cryptocurrency markets and led to extensive legal and restructuring proceedings. Sam Bankman-Fried, the company’s founder and former chief executive, is serving a 25-year prison sentence after being convicted on seven counts of fraud and conspiracy.
Next steps for preferred equity holders and remaining FTX estate actions
Beyond the March 31 creditor distribution, the estate has set a timeline for its first payments to preferred equity holders. The record date for determining eligibility is April 30, with distributions scheduled for May 29. To receive payment, preferred equity holders must complete several steps, including ownership certification, know-your-customer verification, and submission of tax documentation.
The trust stated it began contacting equity holders earlier this year and urged anyone who has not heard from the estate to come forward. Completion of the required documentation will be necessary to participate in the May 29 payout. Additional information on future distribution rounds is expected, with the trust indicating that further timelines will be announced as the process advances.
Customers and investors affected by the collapse must continue to work through the designated channels established by the estate. Those who chose to route their distributions via BitGo, Kraken, or Payoneer are bound by that selection and must use those intermediaries to retrieve or convert their funds, consistent with the terms laid out by the trust.
Conclusion
The forthcoming $2.2 billion distribution scheduled for March 31 marks another key step in the FTX bankruptcy recovery effort, bringing total returned funds to more than $6 billion and pushing several creditor classes toward or beyond full recovery. While creditors receive their fourth round of payments, preferred equity holders are preparing for their first distributions later in the year, as the estate continues to unwind the remains of the once-prominent cryptocurrency exchange.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from cryptonewsbytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
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