FTX Repayment Plan Enters Key Phase This September

This month could finally initiate a concrete turn in the endless FTX saga. Indeed, the FTX Recovery Trust plans to release 1.6 billion dollars for the creditors, marking the third wave of reimbursements since February. In a climate still imbued with distrust, this massive redistribution crystallizes hopes for a credible recovery. However, as payments progress, pressures intensify on the crypto industry, urged to close the chapter of the scandal and restore widely eroded trust.

A new tranche of reimbursements made official by the FTX Recovery Trust

While BitGo and Kraken had distributed 5 billion $ to former exchange clients, the FTX Recovery Trust confirmed in a press release on Friday 19 September the unlocking of 1.6 billion dollars for creditors, with a payment date set for September 30.

This operation fits into the continuity of reimbursements begun at the start of the year. The Trust specifies that payments will be made within three working days after the official date. This is the third distribution of funds since the launch of the restitution plan.

It includes several categories of claims, divided as follows:

• 6 % for the historic clients of FTX.com ;
• 40 % for American users of FTX US ;
• 24 % for unsecured creditors and crypto loans ;
• 120 % for small claims.

This September reimbursement follows two previous tranches: 1.2 billion dollars distributed in February and 5 billion in May, bringing the total amounts already returned to 7.8 billion dollars.

According to official statements, up to 16.5 billion dollars in assets are mobilizable by the Trust to compensate for losses incurred during FTX’s collapse. This gradual process fits into a strict legal framework, established after the exchange’s bankruptcy in November 2022 and the sentencing of Sam Bankman-Fried, FTX founder, to 25 years in prison for massive fraud.

A redistribution with uncertain consequences for markets and creditors

Beyond the figures, this new distribution raises questions about its short-term consequences for the crypto market. The Trust specifies that payments “will be received directly into creditors’ accounts within three business days” after September 30.

This logistical detail takes on full meaning in a context where the potential influx of 1.6 billion dollars could influence the investment or withdrawal behaviors of the beneficiaries.

Such an operation could also have a psychological impact on a community still marked by FTX’s bankruptcy. The fact that some types of creditors benefit from a reimbursement above 100 % could revive tensions or feelings of injustice among other classes of claimants, less well compensated.

At the same time, security concerns remain. The case of Kroll, the debt management company targeted by phishing campaigns, revealed systemic vulnerabilities surrounding massive reimbursements.

In the near future, this restitution dynamic could either serve as a virtuous model for other crypto bankruptcies or turn into a source of volatility in the market. If the upcoming tranches are respected, the Trust could reach its goal of fully redistributing the 16.5 billion dollars in the coming months. However, some uncertainties remain, notably regarding the tax management of these recovered sums or ongoing recourses, including the appeal scheduled for November by Sam Bankman-Fried.