Bankrupt Crypto Exchange FTX To Shell Out $5,400,000,000 to Creditors at the End of the Month

FTX, a bankrupt crypto exchange, has announced plans to distribute $5.4 billion to creditors by the end of the month. Eligible creditors will receive their funds through BitGo or Kraken within 1-3 business days starting May 30th, according to a recent press release.

This payout will come from FTX’s $11.4 billion cash reserves, with additional distributions to be announced in the future. The main creditors of the exchange, which include individuals and institutions with significant holdings on the platform, will benefit from this wave of payments. Smaller creditors in the "Convenience Class" have already begun receiving distributions since February.

In a significant move, a US bankruptcy court has approved FTX’s plan to distribute between $14.7 billion and $16.5 billion to former customers. The plan aims to provide 98% of the exchange’s creditors with approximately 119% of the value of their holdings at the time of FTX’s bankruptcy filing in November 2022.

The increased payouts are attributed to rising crypto prices and FTX’s 8% stake in Anthropic, an AI safety and research company. FTX faced bankruptcy following allegations of mismanagement by its former CEO, Sam Bankman-Fried, who reportedly loaned out billions of dollars of customer deposits to Alameda Research, the exchange’s trading arm.

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