Bankrupt crypto exchange FTX has received U.S. Bankruptcy Court approval to distribute $1.9 billion in cash to creditors, marking a significant development in the platform’s multi-phase wind-down. The court authorized a reduction in FTX’s disputed claims reserve from $6.5 billion to $4.3 billion, thereby freeing up funds earmarked for immediate distribution to verified creditors.
The company announced that August 15, 2025, will serve as the official record date for the upcoming payout. Creditors who wish to participate in this round must have their claims validated, identity documents verified, and tax documentation submitted by that date. Eligible creditors must also complete onboarding with one of three designated payout partners—BitGo, Kraken, or Payoneer.
FTX expects the distribution process to begin on or around September 30, 2025. This marks the latest in a series of repayments following FTX’s high-profile collapse in late 2022, which left billions of dollars in customer funds stranded and triggered a massive legal and regulatory response across the crypto industry.
Eligibility Requirements and Onboarding Instructions
To be included in the $1.9 billion distribution, claimants must have allowed claims under Class 5 (Customer Entitlement Claims), Class 6 (General Unsecured Claims), or qualify under Convenience Claims criteria. Claimants must pass Know-Your-Customer (KYC) verification, submit all necessary tax documentation, and onboard through one of the three approved platforms.
In cases where claims have been sold or reassigned, the new claim holder must appear on the official claims register as of August 15, 2025. FTX officials emphasized that failure to meet any of the listed requirements could result in exclusion from this distribution cycle.
FTX’s trustee has advised all eligible participants to complete the onboarding and compliance process well before the deadline to avoid last-minute complications. Detailed guidance and FAQs have been published on FTX’s restructuring website.
Valuation Disputes and Regional Exclusions Draw Scrutiny
Despite this significant payout, not all creditors will benefit equally. Approximately 5% of the total outstanding claims—an estimated $470 million—are excluded from this round due to legal complications in specific jurisdictions, notably China and Russia. Local crypto regulations in these regions prohibit or complicate disbursement, leaving affected users in limbo.
In addition, the use of November 2022 crypto valuations to calculate payout amounts has become a point of contention. Many digital assets, including Bitcoin and Ethereum, have appreciated significantly since FTX’s collapse. Creditors argue that basing repayments on the depressed prices at the time of the bankruptcy unfairly devalues their claims.
While FTX maintains that the valuation approach aligns with standard bankruptcy procedures, critics say the methodology fails to reflect the real financial losses borne by customers. Some users are reportedly considering legal action to challenge the valuation benchmark.
As FTX works to fulfill its obligations to former users and stakeholders, the ongoing disputes underscore the complexities of unwinding a failed crypto empire—especially in a fast-moving market where asset values can fluctuate dramatically in a matter of months.
